2010 Registration Document - Imerys · 4 2010 REGISTRATION DOCUMENT IMERYS 1 PRESENTATION OF THE...
Transcript of 2010 Registration Document - Imerys · 4 2010 REGISTRATION DOCUMENT IMERYS 1 PRESENTATION OF THE...
2010 Registration Document
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SUMMARY
PRESENTATION OF THE GROUP 3
1.1 Main key figures 4
1.2 The Group’s history, strategy and general structure 5
1.3 Mineral reserves and resources 9
1.4 Minerals for Ceramics, Refractories,
Abrasives & Foundry 16
1.5 Performance & Filtration Minerals 26
1.6 Pigments for Paper 31
1.7 Materials & Monolithics 35
1.8 Innovation 42
1.9 Sustainable Development 46
REPORTS ON THE FISCAL YEAR 2010 59
2.1 Board of Directors’ Management Report 60
2.2 Auditors’ Reports 70
CORPORATE GOVERNANCE 75
3.1 Board of Directors 76
3.2 Executive Management 95
3.3 Compensation 96
3.4 Stock options 101
3.5 Free shares 106
3.6 Specific terms and restrictions applicable
to grants to executive corporate officers 108
3.7 Corporate officers’ transactions in securities
in the Company 109
RISK FACTORS AND INTERNAL CONTROL 111
4.1 Risk factors 112
4.2 Internal control 117
FINANCIAL STATEMENTS 125
5.1 Consolidated financial statements 126
5.2 Statutory financial statements 191
5.3 Audit fees 212
ADDITIONAL INFORMATION 213
6.1 Information concerning the Company 214
6.2 Information concerning the share capital 216
6.3 Shareholding 222
6.4 Elements which could have an impact
in the event of a takeover bid 224
6.5 Imerys stock exchange information 225
6.6 Parent company/subsidiaries organization 227
6.7 Dividends 227
6.8 Shareholder relations 228
ORDINARY AND EXTRAORDINARY
SHAREHOLDERS’ GENERAL MEETING
OF APRIL 28, 2011 229
7.1 Presentation of the resolutions
by the Board of Directors 230
7.2 Auditors’ Reports 236
7.3 Agenda 244
7.4 Draft resolutions 245
PERSONS RESPONSIBLE
FOR THE REGISTRATION DOCUMENT
AND THE AUDIT OF ACCOUNTS 257
8.1 Person responsible for the Registration Document 258
8.2 Certificate of the person responsible
for the Registration Document 258
8.3 Auditors 259
8.4 Information included in the Registration
Document by reference 260
8.5 Person responsible for financial information 260
CROSS REFERENCE
AND RECONCILIATION TABLES 261
9.1 Cross reference table 262
9.2 Table of reconciliation
with the Annual Financial Report 266
IMERYS
French Limited Liability Company (Société Anonyme)
with a Board of Directors
with a share capital of €150,948,310
Registered office:
154, rue de l’Université
75007 Paris – France
Tel: +33 (0) 1 49 55 63 00
Fax: +33 (0) 1 49 55 63 01
562 008 151 R.C.S. Paris
2010 REGISTRATION DOCUMENTINCLUDING THE ANNUAL FINANCIAL REPORT
The original document was fi led with the AMF (French Securities Regulator) on March 31, 2011, in accordance with article 212-13 of the general
regulations of the AMF. As such, it may be used to support a fi nancial transaction if accompanied by a prospectus duly approved by the AMF.
This document was drawn up by the issuer and is binding on its signatories. It includes all information comprising the Annual Financial Report.
This document is a free translation into English of the French Registration Document for convenience purposes only. In case of discrepancies
between both versions, the French one shall prevail.
2 2010 REGISTRATION DOCUMENT IMERYS
1.1 MAIN KEY FIGURES 4
1.2 THE GROUP’S HISTORY, STRATEGY AND GENERAL STRUCTURE 51.2.1 History 5
1.2.2 Strategy 6
1.2.3 Global presence 7
1.2.4 The Group’s general structure 8
1.3 MINERAL RESERVES AND RESOURCES 9
1.4 MINERALS FOR CERAMICS, REFRACTORIES, ABRASIVES & FOUNDRY 161.4.1 Business group overview 17
1.4.2 Minerals for Ceramics 17
1.4.3 Minerals for Refractories and Oilfi elds 20
1.4.4 Fused Minerals 22
1.4.5 Graphite & Carbon 24
1.5 PERFORMANCE & FILTRATION MINERALS 261.5.1 Business group overview 27
1.5.2 Performance Minerals 27
1.5.3 Minerals for Filtration 29
1.6 PIGMENTS FOR PAPER 31
1.7 MATERIALS & MONOLITHICS 351.7.1 Business group overview 36
1.7.2 Building Materials 36
1.7.3 Refractory Solutions 39
1.8 INNOVATION 421.8.1 Research, Technology & Innovation 42
1.8.2 Intellectual property 45
1.9 SUSTAINABLE DEVELOPMENT 461.9.1 Imerys’ Sustainable Development Approach 46
1.9.2 Safety 52
1.9.3 Regulatory Compliance, Auditing 54
1.9.4 Community Relations 54
1.9.5 Human Resources 55
1PRESENTATION OF THE GROUP
4 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Main key figures
1.1 | MAIN KEY FIGURES
(€ millions) 2010 2009 2008 (1) 2007 (1) 2006 (1)
Consolidated results
Sales 3,346.7 2,773.7 3,449.2 3,401.9 3,288.1
Current operating income 419.0 248.9 414.6 482.9 461.0
Net income from current operations, Group’s share 240.3 119.3 267.1 316.7 308.3
Net income, Group’s share 240.8 41.3 161.3 284.2 187.4
Average weighted number of outstanding shares during the year
(thousands) 75,406 72,054 67,486 (6) 68,055 (6) 68,210 (6)
Net income from current operations per share (euros) 3.19 1.66 3.96 (6) 4.65 (6) 4.52 (6)
Dividend per share (euros) 1.20(5) 1.00 0.93 (6) 1.77 (6) 1.68 (6)
Consolidated balance sheet
Shareholders’ equity 2,196.4 1,855.8 1,546.3 1,663.6 1,646.4
Gross financial debt 1,226.2 1,222.4 1,781.6 1,419.1 1,226.7
Cash 353.4 258.1 215.5 76.1 140.6
Net financial debt 872.8 964.3 1,566.1 1,343.0 1,086.1
Financing
EBITDA 621.0 416.6 573.4 649.6 645.6
Capital expenditure (2) 151.2 132.1 237.3 343.4 209.5
Acquisitions (3) 68.9 11.0 155.8 232.8 33.0
Financial resources 2,231.7 2,345.3 2,353.6 2,328.9 2,208.4
Average maturity of financial resources as of December 31 (years) 3.8 4.5 5.5 6.4 4.5
Net financial debt/EBITDA 1.4 2.3 2.7 2.1 1.7
Net financial debt/shareholders’ equity (%) 39.7% 52.0% 101.3% 80.7% 66.0%
ROCE (4) 13.0% 7.6% 12.2% 15.0% 14.4%
Market capitalization as of December 31 3,765 3,166 2,041 3,550 4,269
Employees as of December 31 15,090 14,592 17,016 17,552 15,776
(1) Results for financial year 2006 to 2008 were restated following two changes of presentation applied as of January 1, 2009, details of which are given in note 2 to
the consolidated financial statements.
(2) Paid capital expenditure, net of divestments and subsidies.
(3) Paid acquisitions excluding divestments.
(4) Return on capital employed, i.e. current operating income divided by average invested capital. Average invested capital for a given financial year corresponds to
the average between the capital invested at the beginning of the year and the capital invested at the end of the year. Capital invested at the end of the year is
presented in the consolidated balance sheets by operating section in Chapter 5 of the present Registration Document.
(5) Dividend proposed at Annual General Meeting on April 28, 2011.
(6) Average weighted number of outstanding shares, Net income from current operations per share and dividend per share were restated for financial years 2006 to
2008 further to the rights issue of June 2, 2009.
5IMERYS 2010 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP
1
The Group’s history, strategy and general structure
1.2 | THE GROUP’S HISTORY, STRATEGY AND GENERAL STRUCTURE
1.2.1 HISTORY
Established in 1880, the Group has its origins in mining and
metallurgy. Its core business was then the extraction and processing
of non-ferrous metals.
In 1974, federated under the name Imetal, the Group acquired
the French company Huguenot Fenal, an event which marked its
entry into the clay roof tiles market. The following year, it purchased
Copperweld Corporation (United States), a company specialized
in steel production and metals processing. The first significant
investment in refractories and ceramics was made in 1985, with the
acquisition of Damrec (France).
The Group then structured its business around three sectors:
Building Materials, Industrial Minerals and Metals Processing.
This reorganization was carried out in line with the Group’s prior
withdrawal from non-ferrous metallurgy.
From 1990 onwards, the Group put a strong development emphasis
on industrial minerals (1). It acquired significant positions in white
pigments: kaolin (Dry Branch Kaolin Company, United States), then
calcium carbonate (Georgia Marble, United States). The Group also
expanded into Minerals for Refractories (C-E Minerals, United States)
then their conversion (Plibrico, Luxembourg), clays (Ceratera, France)
and ceramic bodies (KPCL, France). Finally, it entered the graphite
(Stratmin Graphite, Canada, then Timcal, Switzerland) and technical
ceramics markets.
In 1999, with the acquisition of English China Clays plc (ECC, United
Kingdom), one of the world’s foremost specialists in industrial
minerals, the Group became a global leader (2) in white pigments. By
increasing its stake in Imerys Rio Capim Caulim S.A. (Brazil) from
49.7% to almost 100%, the Group optimized its great potential in
kaolin. In parallel, the Group continued to extend its industrial base in
Minerals for Refractories (Transtech and Napco in the United States;
Rhino Minerals in South Africa).
Through the acquisition of ECC and the correlating divestment of
Copperweld (United States) and ECC’s specialty chemicals business
(Calgon, United States), the Group focused on Industrial Minerals
Processing exclusively. To reflect that development, Imetal changed
its name to Imerys.
The Group completed the refocusing process by withdrawing from
activities that no longer corresponded to its core business, including
dimension stones (Georgia, United States) and trading. The specialty
chemicals distribution business (CDM AB, Sweden) was divested
in 2004, followed in 2005 by refractory minerals trading (American
Minerals, Inc, United States) and roofing products distribution
(Larivière, France).
Since 2000, the Group has developed by leveraging its unique know-
how. From a varied portfolio of rare resources, Imerys turns industrial
minerals into specialties with high added value for its customers.
Organized into business groups that correspond to the sectors it
serves, the Group constantly broadens its product range, extends its
geographic network in high-growth zones and enters new markets.
p New Minerals for Ceramics were added to the portfolio, particularly
halloysite (New Zealand China Clays, New Zealand - 2000) and
fine ceramic clays and feldspar (K-T, United States and Mexico –
2001); kaolins, feldspar, micas and quartz (Denain-Anzin Minéraux,
Europe - 2005). The Group increased its Asian market presence
for applications that mainly serve the sanitaryware industry (MRD-
ECC and MRD, Thailand – 2002). In 2007, it developed its reserves
of feldspar, an essential component in ceramics manufacturing
alongside clays and kaolins, in India (Jumbo Mining), the United
States (The Feldspar Corporation) and Turkey.
p The Minerals for Refractories activity expanded its offering
for the refractory and sanitaryware markets and enhanced its
geographic presence with the acquisition of AGS (2006 – France)
and Vatutinsky (2007 – Ukraine), both companies specializing
in calcined clays. The purchase of a 65% stake in Yilong
(2007 – China) gave Imerys access to an excellent quality
andalusite reserve in order to serve the local refractories market.
In 2010, the commissioning of a new plant increased andalusite
production capacity in China, and the Oilfield Minerals division,
created to serve the Oil and Gas markets, joined Minerals for
Refractories business group.
p The Minerals for Abrasives activity was created in 2000 with
the takeover of the world’s leading producer of corundum (fused
alumina and bauxite), Treibacher Schleifmittel (Austria), of which
the remaining shares were acquired in July 2002. A succession of
corundum acquisitions were made in the Czech Republic (2001),
Germany (2001), Brazil (2002) and China, where a 3rd joint venture
was created in 2007 with ZAF. Imerys added zircon, a mineral
for the refractory, technical ceramics and automotive markets
to its portfolio, becoming the world leader with the successive
acquisitions of UCM Group PLC (United Kingdom, 2007), the
European leader in fused zircon, and Astron China, the leading
Chinese zircon product manufacturer (2008). The Minerals for
Abrasives division was then renamed Fused Minerals.
p Minerals for Filtration joined the Group in 2005 with the
acquisition of the world leader in the sector, World Minerals (United
States). This acquisition contributed new minerals (diatomite and
perlite) and a global presence, while following a model that is
consistent with Imerys’ business and skills. Perlite capacities were
bolstered in South America (Perfiltra, Argentina – 2007).
(1) Industrial minerals: non-metallic and non-combustible rocks or minerals, mined and transformed for industrial purposes.
(2) Throughout the Registration Document, information on market positions corresponds to evaluations made by Imerys on the basis of its market knowledge, or is
derived from trade publications such as Roskill and Industrial Minerals, or from reports drawn up by Kline & Company, Inc.
6 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1The Group’s history, strategy and general structure
p Performance Minerals developed with the extension of calcium
carbonate capacities in Central and South America (Quimbarra,
chiefly Brazil – 2000), Asia (Honaik, mainly in Malaysia – 2000)
and France (AGS-BMP’s carbonates activities – 2000). The Group
strengthened its positions in Southern Europe (Gran Bianco
Carrara, Italy and Blancs Minéraux de Tunisie, Tunisia – 2005)
and Turkey (Mikro Mineral, wholly-owned since 2008). In 2008,
the acquisitions of Kings Mountain Minerals, Inc. (North Carolina,
United States) and Suzorite Mining, Inc. (Quebec, Canada) added
high quality mica to the minerals portfolio.
p In Pigments for Paper, development focused on ground and
precipitated calcium carbonates, which now account for more
than half the Group’s sales to the paper industry. Nine new
production units have been built since 2004, mainly in the Asia-
Pacific zone (India, China, Indonesia and Japan). To support the
development of activities in Asia, extensive reserves of high quality
white marble have been acquired in Malaysia, China and Vietnam
in recent years. In Brazil, the business group strengthened and
secured its kaolin supply with the acquisition of Pará Pigmentos
S.A. in July 2010.
p The Group’s Building Materials activity was strengthened in clay
bricks in France with the acquisition of Marcel Rivereau (2004).
Clay roof tiles and bricks activities in Spain and Portugal were
divested in 2007. In late 2008, Imerys TC created CapteliaTM, a
joint venture (1) with EDF ENR (Énergies Renouvelables Réparties
– distributed renewable energies), with the vocation of developing
and manufacturing integrated photovoltaic roof tiles to spread
energy generation on traditional roofing. In 2009, Planchers
Fabre, an activity specializing in concrete joists, was sold to the
French leader in the sector.
p In Refractory Solutions, the acquisition of Lafarge Refractories
(2005) made Imerys the European leader in the sector and gave it
a foothold in Asia. The merger of these activities with Plibrico led
to the creation of a new entity, Calderys. ACE, the Indian leader in
monolithic refractories, joined the Group in 2007, giving Calderys
a new dimension in this fast-growing country. Calderys developed
in South Africa (B&B – 2007) and Scandinavia (Svenska Silika
Verken AB – Sweden – 2008). These operations established
Imerys as a world leader in monolithic refractories. In refractory
Kiln Furniture, Imerys is also building front-rank positions in Asia
(Siam Refractory Industry Co, Ltd, Thailand – 2002) and Europe
(Burton Apta, Hungary – 2004).
(1) Held 50/50 by the two partners.
1.2.2 STRATEGY
Imerys’ strategy is based on strict management of its activities,
reinvesting cash flows into the Group’s development and sharing
value creation with its shareholders.
❚ A ROBUST GROWTH MODEL
Since 1998, Imerys has carried out structural reorganizations of its
portfolio and successfully tripled the revenues of its core business
to become the world leader in adding value to industrial minerals.
After coping with an unprecedented economic crisis from mid-2008,
the Group made cash flow generation its priority and substantially
reduced its fixed costs and overheads. Thanks to its reactivity, Imerys
restored an operating margin of 12.5% and resumed internal and
external growth investments in 2010.
Imerys’ growth model is based on three development avenues:
p Acquiring new minerals to enhance its product portfolio, bolster
its presence on existing markets and serve new markets, mainly
through external growth.
The Group has implemented a particularly active acquisitions
policy since 2004, with more than 40 external growth operations
completed, of which 21 in emerging countries (Asia, South
America, former CIS) for a total amount of almost €1 billion.
For example, Imerys entered the beverage filtration market by
adding diatomite and perlite to its minerals portfolio with the
acquisition in 2005 of World Minerals, the world leader in Filtration
Minerals. The following year, the Group began extending the use
of perlite to the construction sector by adding it to paint as a
matting agent.
p Penetrating new markets through new applications, based on
the existing range or on new minerals.
Research & Development efforts enable new products to be
developed in all business groups every year.
p Developing internationally, in order to support its customers
and take advantage of growth in mature countries, as well as the
dynamism of emerging markets.
This development takes place through internal and external
growth. Whereas the share of emerging countries in the
Group’s sales was insignificant in 2000, Imerys’ growth in those
geographic areas has been rapid over the past 10 years, as 26%
of turnover was achieved in emerging markets in 2010.
7IMERYS 2010 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP
1
The Group’s history, strategy and general structure
❚ A DYNAMIC CAPITAL EXPENDITURE POLICY
In addition to the capital expenditure needed to keep its production
assets in perfect working order, the Group improves the industrial
efficiency of its processes, increases capacities to meet demand,
develops outlets in new countries and launches innovative products.
From 2000 to 2008, Imerys allocated significant resources to the
implementation of projects intended to ensure industrial facilities
meet world-class technological standards, improve their efficiency
(kaolin for paper, minerals for filtration, clay roof tiles) and selectively
develop capacity. Over this period, Imerys invested 80% - 130% of
its depreciation expense every year.
Benefiting from high-performance industrial assets, the Group was
able to reduce its capital expenditure sharply to optimize its cash
flow in 2009. Booked capital expenditure totaled €118.7 million (i.e.
65% of depreciation expense), compared with €238.2 million in 2008
and €367.0 million in 2007. The capital expenditure needed to keep
production assets in perfect working order represents approximately
50% - 60% of annual depreciation expense. At €169.1 million, booked
capital expenditure is low in 2010 and remains below pre-crisis levels.
❚ A SOUND FINANCIAL STRUCTURE
The same strict profitability criteria, applied to capital expenditure
and acquisitions, enable Imerys to target value-creating projects. The
selectiveness of new projects was increased: beyond the minimum
profitability criterion required for an acquisition (forecast internal rate
of return > 15% after tax and before financing), the assessment also
includes its impact on the Group’s financing and the speed of return
on investment.
In the context of the economic crisis, since mid-2008, cash flow
generation and working capital optimization have been the priority,
which allowed organic debt reduction in addition to the €251 million
rights issue carried out in the first half of 2009 with the support of
existing shareholders. Net financial debt totaled €872.8 million as
of December 31, 2010, despite the acquisition of PPSA for a total
amount of US$70 million, i.e. a net debt/shareholders’ equity ratio of
39.7% (€964.3 million and 52.0% respectively a year earlier).
As of December 31, 2010, Imerys’ financial resources totaled more
than €2.2 billion (of which more than €1 billion in available financial
resources). No significant repayment is due before late 2012. As
of December 31, 2010, Imerys’ long-term Moody’s rating is Baa3,
positive outlook. Imerys has a healthy financial structure and all the
flexibility needed to take advantage of the upturn in growth when
it occurs.
The Board of Directors will submit to the Shareholders’ General
Meeting on April 28, 2011 a dividend of €1.2 per share. Payout would
take place from May 11, 2011 for a total amount of approximately
€90.6 million, which represents 37.7% of the Group’s share of net
current income.
1.2.3 GLOBAL PRESENCE
❚ MARKETS SERVED
In 2010, the Group estimates that its sales, by destination, serve the following markets and geographic zones:
ConsumerGoods
IndustrialEquipment
NewConstruction
Renovation
15%12%18%
8%5%11%
2%10%
2%9%
Europe Others, of whichemerging countries (26%)
and Japan and Australia (5%)
4%
4%
NorthAmerica
48% 21% 31%
45%
24%
16%
15%
8 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1The Group’s history, strategy and general structure
❚ GEOGRAPHIC BASES
Imerys is present in the following 47 countries:
p North America: Canada, United States;
p South America: Argentina, Brazil, Chile, Mexico, Peru, Venezuela;
p Europe: Austria, Belgium, Czech Republic, Denmark, Finland,
France, Germany, Greece, Hungary, Italy, Luxembourg,
Netherlands, Poland, Portugal, Romania, Russia, Slovenia, Spain,
Sweden, Switzerland, Ukraine, United Kingdom;
p Africa: South Africa, Tunisia, Zimbabwe;
p Middle East: Turkey, United Arab Emirates;
p Asia & Oceania: Australia, China, India, Indonesia, Japan,
Malaysia, New Zealand, Singapore, South Korea, Taiwan,
Thailand, Vietnam.
The breakdown of industrial sites by geographic zone is as follows:
Geographic zone Number of sites
Europe 119
North America 66
Asia-Pacific / Africa 60
1.2.4 THE GROUP’S GENERAL STRUCTURE
The Group is organized into operating activities that are centered on clearly identified markets, according to Imerys’ decentralized management
principle. Beyond legal structures, this favors a market and business-focused rationale. The customer-oriented approach fosters the
implementation of consistent policies within each activity.
The Group is organized into four business groups, as described below:
Minerals for Ceramics, Refractories, Abrasives
& Foundry
€1.105 million,
i.e. 32% of 2010 consolidated sales
Minerals for Ceramics
Minerals for Refractories and Oilfields
Fused Minerals
Graphite & Carbon
Performance & Filtration Minerals
€595 million,
i.e. 17% of 2010 consolidated sales
Performance Minerals North America
Filtration Minerals North America
Performance & Filtration Minerals Europe
Performance & Filtration Minerals Asia-Pacific
Performance & Filtration Minerals South America
Vermiculite
Pigments for Paper
€767 million,
i.e. 23% of 2010 consolidated sales
Pigments for Paper North America
Pigments for Paper South America
Pigments for Paper Asia-Pacific
Pigments for Paper Europe
Materials & Monolithics
€923 million,
i.e. 28% of 2010 consolidated sales
Building Materials
Refractory Solutions
Details of the activities of each business group are given in sections 1.4 to 1.7 of the present chapter.
This market-driven organization is consistent with the sector-based
information given in the Group’s consolidated financial statements
in chapter 5 of the present Registration Document.
Chaired by the Chief Executive Officer of Imerys, and comprised
of the Group’s main line and support managers, the Executive
Committee implements the Group’s strategy as defined by Imerys’
Board of Directors. In particular, the Executive Committee determines
major policies, sets the Group’s performance improvement goals,
decides on the action plans to be set up by line activities and
monitors their implementation.
The role of the business groups and activities leaders is to act in
line with the Group’s strategic orientations. These are centered on a
multi-year plan that includes internal and external growth objectives.
(For more details on the missions, composition and workings of the
Executive Committee, see chapter 3, paragraph 3.2.4. of the present
Registration Document).
9IMERYS 2010 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP
1
Mineral reserves and resources
1.3 | MINERAL RESERVES AND RESOURCES
In order to supply its processing plants with a broad range of raw
materials to meet its customers’ requirements, Imerys operates
mines and quarries in various countries around the world. The Group
actively pursues the replacement and growth in its mineral reserve
and resource base and continually works to strengthen its technical
expertise in geology, mine planning and mining expertise and sharing
of “best practices”. In 2010, extraction campaigns scaled up after
low activity in 2009 and geoscientists focused on the development
of new deposits, mainly in rapid growth regions (Turkey, Greece,
China, Malaysia). In Brazil, Imerys extended its kaolin reserves and
resources through the acquisition of Pará Pigmentos S.A. (PPSA).
Since the implementation of Mineral Reserves and Resources
Reporting in 2002 and the first external audit conducted in 2004
(fair value measurement of minerals reserves and resources as part
of the first time adoption of IFRS standards), the procedures in force
have been regularly updated and a new online reporting system
was implemented in 2009 to streamline and improve the reporting
process. In line with Imerys internal policy, mineral reserves and
resources are audited on a regular basis, by internal and external
auditors. The second multi-annual cycle of geological audits,
begun in 2008, shows continuous improvement in mineral reserve
management processes and reporting. The mineral reserves and
resources published in this Registration Document are prepared
and verified in accordance with the relevant mining and processing
practiced in each reporting entity.
❚ IMERYS’ PORTFOLIO OF MINERALS
The geological origins, specific properties, final applications and ore
body locations of each mineral mined or processed by Imerys are
presented below.
Minerals mined by Imerys
Ball clays
Ball clays are very fine-grained sedimentary clays with high plasticity
properties used in ceramic applications.
After extraction, the clay materials are selected, processed and
blended to provide the desired performances. These materials
include good rheological stability for casting applications such as
sanitaryware, high plasticity and strength for tableware, or firing
properties for tile applications. Ball clays also have applications in
the rubber industry and in refractory sectors.
Imerys’ main ball clay deposits are found in France at numerous
locations (Charentes, Indre, Allier and Provins basins), in United
Kingdom (Devon and Dorset), the United States (Kentucky,
Mississippi and Tennessee) and Thailand (Lampang Province).
Carbonates
Ground calcium carbonate (GCC) is produced from chalk,
limestone or marble. GCC is obtained by grinding calcium carbonate
materials mined from quarries, with further processing applied to
develop certain properties that improve the physical characteristics
of finished products. GCC is renowned for its whiteness and alkaline
properties.
GCC is used mainly as a filler or coating pigment in the paper
industry. It also has applications in performance mineral applications,
such as paints and coatings, plastics, sealants, air purification and
the environment.
The Group’s extensive calcium carbonate reserves are located in
Brazil, China, France, Greece, Italy, Malaysia, Mexico, North America,
Tunisia, Turkey, United Kingdom and Vietnam.
Red clays
Red clays are composed of assemblages of clay minerals and
oxides of sedimentary origin which develop a red color when fired.
They are used to make building materials (roof tiles and bricks) and
meet specific requirements in terms of particle size distribution,
plasticity and extrusion properties before firing, as well as good
performance during drying and firing.
Extensive reserves of clay with sought-after properties are located
close to the Building Materials activity’s various production units in
France.
Feldspar
Feldspar is a group of naturally occurring alumino-silicates
containing different levels of potassium, sodium, calcium and/or
lithium. These minerals are known for their fluxing properties and
application in ceramic bodies and in the glass industry. Feldspars
of different mineralogical and chemical compositions impart specific
properties to a wide range of final products. In powder form, feldspar
serves as applications in hardening plastics. Feldspar is also used in
paints, coatings and rubber.
The Group has feldspar operations in France (Burgundy, Allier,
Pyrénées-Orientales), Germany (Sarre, Bavaria), India (Hyderabad,
Andrah Pradesh), Portugal, Spain (Caceres – Estremadura,
Salamanca and Valencia regions), in Turkey and the United States
(North Carolina).
Kaolin
Kaolin is predominantly composed of kaolinite, a white hydrated
alumino-silicate. This clay mineral is derived from the geologic
alteration of granite or similar rock types. Also known as china clay,
it is mined in open cast mines or quarries.
10 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Mineral reserves and resources
Specific processes impart targeted properties for a variety of end
uses. These include paper (where whiteness and opacity, as well
as gloss, smoothness and printability are sought after properties);
performance minerals (in paint, rubber, plastics and sealants);
ceramics, ranging from superwhite tableware, the ever-increasing
technical demands of the sanitaryware and floor tile industries to
fiberglass. For a number of applications, kaolin is calcined and then
further processed. Calcination transforms kaolin at high temperature
(700-1,200°C) into a whiter and inert mineral (metakaolin) for end
applications in performance minerals, refractories and ceramics.
Mines are located in various regions around the world and Imerys is
the only producer that is active in all three major high quality kaolin
producing areas for paper. Each location offers its own unique and
specific characteristics: United Kingdom (Cornwall) for filler kaolins;
United States (Georgia) for paper and board coating applications
and opacifying effects; and Brazil (the Amazon Basin) for coating
applications due to its fine, steep particle size distribution. In July
2010, the acquisition of Pará Pigmentos S.A. (PPSA) marked a
significant move to ensure the sustainable long term supply of high
quality kaolin. The PPSA reserves are complementary and together
with the existing reserves at RCC provide the full range of products
required for the key segments supplied by Pigments for Paper
business group.
For Performance Minerals and Ceramics, Imerys mines outstanding
kaolin reserves located in Australia (Victoria), France (Brittany and
Allier), New Zealand (Matauri Bay), Thailand (Ranong Province),
Ukraine (Donetsk), United Kingdom (Cornwall) and in the United
States (South Carolina and Georgia).
Minerals for Filtration
Diatomite is a special sedimentary silica mineral resulting from the
accumulation of skeletal remains of microscopic freshwater or marine
plants called diatoms. Imerys’ diatomaceous earth mines are located
in Chile, China, France, Mexico, Peru, Spain, and the United States
(California, Washington, Nevada).
Perlite, a volcanic rock, contains between 2% and 5% of natural
combined water. When heated, the water converts instantaneously
to steam and the perlite ore explodes like popcorn, expanding up to
20 times its original volume and creating a multi-cellular material with
large surface area and corresponding low density. Perlite mines are
located in Argentina, Chile and in the United States (New Mexico,
Arizona, Utah).
Diatomite and Perlite are two naturally occurring raw materials which
have exceptional qualities: low density, high surface area and high
porosity. The unique properties of these Imerys products are sought
after in many applications, particularly as filtration aids, as additives
in Performance Minerals applications and paint.
Minerals for Refractories
Minerals for refractories offer properties such as high resistance to
degradation in extreme temperatures and harsh operating conditions,
as well as resistance to mechanical failure and corrosion.
Imerys supplies from its own mines a wide range of high-quality acid
refractory products with high alumina content:
Andalusite is a natural occurring alumina-silicate mineral containing
up to 60% alumina that converts into mullite when heated to 1,350°C.
Imerys mines very high-quality andalusite deposits located in China,
France and South Africa.
Refractory clay occurs as a hard and often carbon-rich fine kaolin
that produces upon calcination, a high-density refractory material
commonly called “chamotte” which has specialized refractory and
ceramic applications. Imerys refractory clay deposits are located
in France, South Africa, Ukraine and the United States (Georgia).
Bauxite and bauxitic kaolin are minerals found in sedimentary
deposits. Imerys products have the unique characteristic of being low
in iron content. They are used in a wide range of refractory products.
Group deposits are located in the United States (Alabama, Georgia).
Other minerals
Bentonite is an alumino-silicate sedimentary clay with high
rheological and absorbent properties. After processing, bentonite
finds applications in foundry sands, oil well drilling, ore pelletizing
as well as in cement, sealants, adhesives, ceramic bodies and
cosmetics. The Group’s bentonite deposit is located in South Africa.
Graphite is one of the crystalline forms of carbon, with a micaceous
aspect. Natural graphite is produced by Imerys from the Lac-des-Iles
mine in Canada – the largest graphite mine in North America.
Customers are supplied worldwide in the mobile energy, engineering
materials, additives for polymers, lubricants, refractories and
metallurgy sectors.
“Grès de Thiviers” is a natural colored sandstone used as body
stain for ceramics. This mineral pigment is mined by the Group in the
French region of Dordogne. In recent years, a wide range of colors
has been developed to broaden the market for the red pigment “Grès
de Thiviers”. These include ranges of pinks and browns, as well as
grays available with or without a metallic effect.
Halloysite is a high-quality, very white clay mineral, especially sought
after by the fine porcelain industry worldwide for its translucent effect.
The Group operates deposits in New Zealand.
Mica (Muscovite and Phlogopite mica): the term “mica” covers a
group of alumino-silicate minerals with a platy structure, each with
its own physical and chemical characteristics. It is distinguished
11IMERYS 2010 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP
1
Mineral reserves and resources
from other minerals by qualities such as insulation and elasticity.
Mica imparts thermal stability, resistance to heat, moisture and light
transmission in coatings, while offering decorative effects. It also
increases durability characteristics of plastic composites used in
automotive applications. Imerys produces mica from its mica mine
in North America (United States and Canada) and as a by-product
of kaolin and feldspar mining in France (Brittany and Morvan) and in
the United States (North Carolina).
Quartz is the most common mineral on earth and available in
almost all mineral environments as an essential component of many
rock types. Imerys mines high-purity quartz (> 99.8% silica) in two
forms: block (quartz veins) and gravels; both offer similar properties:
strength, refractoriness, wear resistance required in tile making and
ornaments. Silicon and ferro silicon, for which quartz is the basic raw
material, are used in special steel alloys. Quartz is also the basic raw
material for silicone and silane based chemicals. Imerys produces
quartz from pure quartz deposits in France (Lot, Dordogne) and
Sweden, or as a by-product of kaolin or feldspar mining. Quartz
is also available in a range of colors to supply a variety of markets.
Slates is extracted by Imerys from an underground mine in France
(Angers). This operation is highly specialized in the extraction and
processing of natural high quality slate, which is prized for roofing
of prestigious buildings.
Vermiculite is a hydrated micaceous mineral, which expands
considerably when heated. Applications are essentially in the
horticulture and heat insulation. Vermiculite is produced from Group’s
mines mainly in Australia (Alice Springs) and Zimbabwe (Shawa).
Derived mineral products
Precipitated calcium carbonate (PCC)
PCC is produced chemically from natural limestone, which is burnt
to form lime and then re-precipitated by adding carbon dioxide.
This controlled process delivers a pigment with well-defined shape
and size parameters and excellent optical properties. PCC is mainly
used in the paper industry (filling and coating applications) as well
as in performance minerals applications such as paint, coatings and
plastics. Imerys produces PCC-based filler and coating pigments in
its plants in Argentina, Brazil, China, India, Indonesia, and the United
States and in Sweden.
Synthetic corundum and fused alumina
Externally sourced bauxite and alumina are transformed by fusion
in electric arc furnaces into various synthetic corundum products
for the production of powders for abrasive applications. Plants are
located in China, Europe, North and South America.
Silicon carbide
Silicon carbide, is a by-product of graphite production with high
wear resistance and refractory properties. Imerys’ production
facilities are in Brazil and Switzerland.
Synthetic graphite
Imerys produces a range of high-quality synthetic graphite through
a complex process of heat treatment of petroleum coke at very high
temperatures. The plant is located in Switzerland.
Carbon black
Carbon black, an ultra-fine carbon powder, is produced from
selected, very high-quality, externally sourced carbon raw materials.
The plant is located in Belgium.
Zirconia
Zircon occurs as one of the minerals found in heavy mineral sand
sedimentary deposits derived from the alteration of granite or alkaline
rocks. Zircon’s main characteristics are its opacifying properties
in ceramics, a very high fusion temperature (above 1,800°C) and
hardness.
After transformation in electric arc furnaces, grinding and
classification, zircon-based products are sold as various grades of
zircon flour and zirconium silicate, used in high-temperature industries
such as casting, refractories, and ceramics. Fused and chemical
zirconias are specialty products with applications in the ceramics,
refractories, electronics, paper, leather and paint industries, as
well as in chemical catalysts, vehicle exhausts, catalytic converters,
heat-resistant and abrasive coatings and advanced ceramics. Zircon
sand is purchased externally and processed in China, Germany and
the United States.
Electrical grade magnesia
Electrical grade magnesia is produced from externally purchased
dead burned magnesite and has high electrical resistance
properties, depending on the temperature of calcination, and poor
heat conductivity, making it suitable for insulation material in the
manufacture of domestic and industrial sheathed heating elements.
Plants are located in the United Kingdom and in the United States.
❚ MINERAL REPORTING PRINCIPLES APPLIED
BY IMERYS
Imerys mining organization and regulatory framework
Imerys’ team of geologists ensures long-term access to quality
deposits by conducting the necessary exploration work on deposits
owned by Imerys or secured under long-term leases in order to
establish a long-term vision at each operation.
Imerys’ reporting on mineral reserves and resources is conducted
by “Competent Persons” who are duly appointed and responsible
for reporting in compliance with the PERC (1) Code.
(1) PERC: Pan-European Reserves and Resources Reporting Committee.
12 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Mineral reserves and resources
Applicable since January 1, 2009 by companies based in mainland
Europe, the United Kingdom and Ireland, PERC replaces the 2001
Reporting Code (1). This body factors in the recent improvements
made to Australian, South African, American and Canadian mining
codes and forms the new international benchmark. In particular,
reporting rules have been reviewed and adapted to the specificities of
the industrial minerals business, establishing a reference framework
for this sector.
Similar codes, including JORC (Australia), Samrec (South Africa), SME
Industry Guide 7 (United States), the Canadian Institute of Mining’s
definitions as required under N143-101 and the Certification Code
(Chile, Peru and the Philippines), all in compliance with CRIRSCO’s (2)
International Reporting Template, form best practices and have been
adopted as reporting standards by the mining industry in the Western
world.
A central register of Competent Persons is kept at Group level.
A written declaration from each Competent Person at Imerys
authorizing the compilation of the estimates reported for public
reporting is kept in the register.
Audit
In order to ensure Group-wide consistency in reporting and
compliance with Reporting Code requirements, internal and external
audits are conducted on a 3-year cycle. Audits are carried out by an
experienced Group geologist having no subordination connection
to the audited sites and are designed to ensure compliance with
the PERC Code and to provide best practices for continuous
improvement in the management and operation of the Groups’
mineral deposits. Lastly, the Audit Committee examines the results
of Imerys’ reporting on mineral reserves and resources.
Definitions
Minerals, when discovered, become a Mineral Resource. Resources
can be inferred, indicated or measured, depending on the knowledge
level of the deposit. When all conditions are met for that Resource
to be economically extracted, it becomes a Mineral Reserve
(Probable and then Proven Mineral Reserve, according to the level
of confidence).
Mineral Resource
A Mineral Resource is a concentration or occurrence of material
of economic interest in or on the earth’s crust in such form, quality
and quantity that there are reasonable prospects for eventual
economic extraction. The location, grade, continuity and other
geological characteristics are known, estimated or interpreted from
specific geological evidence and knowledge. Mineral Resources are
subdivided in order of increasing geological confidence into Inferred,
Indicated and Measured.
An Inferred Mineral Resource is the part of a Mineral Resource
for which quantity and grade can be estimated with a low level of
confidence. It is inferred from geological evidence and assumed
but not verified to confirm geological and/or grade continuity. It is
based on information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill holes
which is limited or of uncertain quality and reliability.
An Indicated Mineral Resource is the part of a Mineral Resource
for which tonnage; densities, shape, physical characteristics,
grade and mineral content can be estimated with a reasonable
level of confidence. It is based on exploration, sampling and
testing information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill holes.
The locations are too widely or inappropriately spaced to confirm
geological and/or grade continuity but are spaced closely enough
for continuity to be assumed.
A Measured Mineral Resource is that part of a Mineral Resource
for which tonnage, densities, shape, physical characteristics,
grade and mineral content can be estimated with a high level of
confidence. It is based on detailed and reliable exploration, sampling
and testing information gathered through appropriate techniques
from locations such as outcrops, trenches, pits, workings and drill
holes. The locations are spaced closely enough to confirm geological
and grade continuity.
Mineral Reserve
The Mineral Reserve is the economically exploitable part of an ore
deposit previously defined as a Measured or Indicated Resource
under realistically assumed present and forecast economic,
market, legal, environmental, social and government factors. These
assessments demonstrate at the time of reporting that exploitation
is justified. Mineral Reserves are sub-divided in order of increasing
confidence into Probable Mineral Reserves and Proven Mineral
Reserves.
A Probable Mineral Reserve is the economically mineable part
of an Indicated and in some circumstances a Measured Mineral
Resource, whereas a Proven Mineral Reserve is the economically
mineable part of a Measured Mineral Resource.
Proven Mineral Reserves represent the highest confidence level
of the estimates.
Risks and uncertainties
Mineral reserves and resources are estimates of the size and quality
of ore deposits based on currently available technical, economic,
market and other parameters. Due to unforeseen changes in these
parameters and the uncertainty inherently associated with resource
evaluation, no assurance can be given that the estimates of mineral
(1) 2001 Reporting Code: Code for reporting of Mineral Exploration Results, Mineral Resources and Mineral Reserves.
(2) CRIRSCO: Committee for Mineral Reserves International Reporting Standards.
13IMERYS 2010 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP
1
Mineral reserves and resources
reserves and resources shown in the table below will be recovered
as anticipated by the Group.
With continued geological exploration and evaluation, mineral
reserves and resources may change significantly, either positively
or negatively.
To date, there are no known environmental, authorization, legal,
ownership, political or other relevant issues that could materially
adversely affect the estimates in these tables.
Please refer to chapter 4, paragraph 4.1.1 of the Registration
Document.
❚ MINERAL RESERVES (ESTIMATES AS OF 12/31/2010 VS. 12/31/2009)
In line with the special conditions relating to the “Reporting of
industrial minerals, stone and aggregates” in the PERC Code,
categories of minerals, in which mineral types have been grouped
together to protect commercially sensitive information, have been
created for the purpose of Imerys’ public reporting of its reserves
and resources.
Due to aggregation, it is not possible to give the lifespan of each mine.
However, based on the geological work done and modifying factors
applied, the Group foresees that its mineral reserves and resources
will be adequate to sustain long-term operation of its activities at the
current annual rate, using existing technology and under present and
forecast market conditions.
Reserves are quoted in addition to resources as on December 31,
2010 and are stated on the basis of thousands of metric tons of
dry sellable product. Estimates for 2009 are shown for the sake of
comparison.
Ongoing exploration work, geological assessments and mining
activities, as well as changes in ownership of certain mineral rights
due to acquisitions or sales, are reflected in the movements of the
estimates reported for 2010 against those reported for 2009.
14 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Mineral reserves and resources
❚ MINERAL RESERVES ESTIMATES (AS OF 12/31/2010 VS. 12/31/2009)
Product Region Proven Probable Total Proven Probable Total
2010 (kt) 2009 (kt)
Ball Clays Asia/Pacific 1,076 - 1,076 1,133 - 1,133
Europe incl. Africa 14,122 4,095 18,217 14,680 4,428 19,108
North America 7,913 1,508 9,421 5,977 343 6,320
Total 23,111 5,603 28,714 21,790 4,771 26,561
Carbonates
(Calcite, Marble, Chalk, Limestone,
Dolomite & Dimension Stone)
Asia/Pacific 2,250 33,063 35,313 2,608 14,839 17,447
Europe incl. Africa 6,816 14,702 21,518 9,333 13,926 23,259
North America 153,469 45,649 199,118 181,202 45,119 226,321
South America 5,431 - 5,431 5,663 - 5,663
Total 167,966 93,414 261,380 198,806 73,884 272,690
Clays
(Brick & Roof tile raw materials)
Europe 64,947 27,126 92,073 66,664 23,834 90,498
Total 64,947 27,126 92,073 66,664 23,834 90,498
Feldspar, Feldspathic sand & Pegmatite
Asia/Pacific 189 112 301 259 120 379
Europe 16,762 9,876 26,638 25,844 15,984 41,828
North America 1,728 - 1,728 1,895 - 1,895
Total 18,679 9,988 28,667 27,998 16,104 44,102
Kaolin
Asia/Pacific 391 3,309 3,700 465 3,400 3,865
Europe 8,271 14,490 22,761 9,057 14,846 23,903
North America 29,578 9,013 38,591 29,896 9,401 39,297
South America 38,799 2,534 41,333 29,890 - 29,890
Total 77,039 29,346 106,385 69,308 27,647 96,955
Minerals for Filtration
(Perlite & Diatomite)
Asia/Pacific - 119 119 7 129 136
Europe 352 209 561 500 276 776
North America 30,503 8,451 38,954 30,768 8,753 39,521
South America 496 1,064 1,560 308 1,018 1,326
Total 31,351 9,843 41,194 31,583 10,176 41,759
Minerals for Refractories
(Andalusite, Quartzite, Bauxite, Bauxitic kaolin,
Ref clays & kaolin)
Asia/Pacific - 378 378 - 378 378
Europe incl. Africa 3,993 2,992 6,985 4,516 2,641 7,157
North America 5,152 - 5,152 5,464 - 5,464
South America - - - - - -
Total 9,145 3,370 12,515 9,980 3,019 12,999
Other minerals
(Bentonite, Grès de Thiviers, Vermiculite,
Quartz, Slate, Graphite) Total 2,819 924 3,743 3,077 931 4,008
In addition to the normal activities of exploration, transfer from resources and re-assessments, significant changes were the result of major
transfers from resources at operations in USA (Ball clay), China & Malaysia (Carbonates) and France (Clays); re-assessments at operations in
France (Clays), Greece (Carbonates) and Australia (Vermiculite); an acquisition in Brazil (Kaolin); sale of operations in USA (Carbonates) and
Germany & Spain (Feldspar). All estimates are quoted in dry metric tons final product equivalent. Clays are quoted in dry processable metric tons.
15IMERYS 2010 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP
1
Mineral reserves and resources
❚ MINERAL RESOURCES ESTIMATES (AS OF 12/31/2010 VS. 12/31/2009)
Product Region Measured Indicated Inferred Total Measured Indicated Inferred Total
2010 (kt) 2009 (kt)
Ball Clays
Asia/Pacific 175 - - 175 183 - - 183
Europe incl. Africa 5,709 2,123 2,585 10,417 5,205 1,944 2,502 9,651
North America 6,093 15,173 11,738 33,004 6,561 18,983 9,668 35,212
Total 11,977 17,296 14,323 43,596 11,949 20,927 12,170 45,046
Carbonates
(Calcite, Marble, Chalk,
Limestone, Dolomite
& Dimension Stone)
Asia/Pacific 746 15,194 10,506 26,446 - 13,894 28,956 42,850
Europe incl. Africa 2,226 9,954 78,338 90,518 - 5,254 68,738 73,992
North America 56,925 116,057 91,857 264,839 56,925 102,551 128,544 288,020
South America 11,085 10,900 22,983 44,968 11,085 10,900 22,983 44,968
Total 70,982 152,105 203,684 426,771 68,010 132,599 249,221 449,830
Clays
(Brick & Roof tile raw
materials)
Europe 23,745 18,534 - 42,279 22,095 21,112 - 43,207
Total 23,745 18,534 - 42,279 22,095 21,112 - 43,207
Feldspar, Feldspathic
sand & Pegmatite
Asia/Pacific - 515 - 515 - 565 20 585
Europe 6,377 23,720 27,318 57,415 5,826 22,482 37,460 65,768
North America 3,409 14,134 106 17,649 3,382 14,280 106 17,768
Total 9,786 38,369 27,424 75,579 9,208 37,327 37,586 84,121
Kaolin
Asia/Pacific 30 5,459 2,960 8,449 - 5,241 3,178 8,419
Europe 3,439 6,039 38,041 47,519 3,308 6,039 43,041 52,388
North America 17,286 22,712 33,163 73,161 16,781 18,837 34,648 70,266
South America 27,210 55,955 143,803 226,968 2,472 - 7,008 9,480
Total 47,965 90,165 217,967 356,097 22,561 30,117 87,875 140,553
Minerals for Filtration
(Perlite & Diatomite)
Asia/Pacific 90 - - 90 90 - - 90
Europe 208 3,628 270,535 274,371 322 3,736 324,157 328,215
North America 19,881 31,364 28,626 79,871 20,607 32,594 30,001 83,202
South America - 812 74,402 75,214 - 30 74,402 74,432
Total 20,179 35,804 373,563 429,546 21,019 36,360 428,560 485,939
Minerals for Refractories
(Andalusite, Quartzite,
Bauxite, Bauxitic kaolin,
Ref clays & kaolin)
Asia/Pacific - 980 2,072 3,052 - 980 2,072 3,052
Europe incl. Africa 2,508 1,831 4,570 8,909 2,335 2,056 4,670 9,061
North America 12,189 246 137 12,572 12,454 246 137 12,837
South America - 1,539 - 1,539 - 1,539 - 1,539
Total 14,697 4,596 6,779 26,072 14,789 4,821 6,879 26,489
Other minerals
(Bentonite, Grès de Thiviers,
Vermiculite, Quartz, Slate,
Graphite)
Total
1,713
6,677
4,372
12,762
1,473
6,487
4,464
12,424
In addition to the normal activities of exploration, transfer to reserves and re-assessments, significant changes were the result of major transfers
to reserves at operations in USA (Ball clay), China & Malaysia (Carbonates) and France (Clays); re-assessments at operations in USA (Kaolin &
Diatomite); acquisitions in Greece (Carbonates), France (Clays) and Brazil (Kaolin); non reneweable leases of operations in USA (Carbonates)
and Turkey (Perlite); sale of operations in USA (Carbonates), Germany & Spain (Feldspar) and France (Kaolin). All estimates are quoted in dry
metric tons final product equivalent. Clays are quoted in dry processable metric tons.
16 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Minerals for Ceramics, Refractories, Abrasives & Foundry
1.4 | MINERALS FOR CERAMICS, REFRACTORIES, ABRASIVES & FOUNDRY
In 2010, the business group is organized around the 4 following
activities:
p Minerals for Ceramics;
p Minerals for Refractories and Oilfields;
p Fused Minerals;
p Graphite & Carbon.
The business group has a wide range of extensive and high quality
mineral reserves. With expertise in all the processing techniques
required, it offers a great variety of products that meet the specific
requirements of the industries it serves, especially in terms of
chemical composition, mechanical properties, thermal and chemical
resistance. Relevant collaboration and resource-sharing take place
across these activities on a case-by-case basis.
After having completed acquisitions since 2007, enlarging its activities
in ceramics and foundry (feldspar, zircon) as well as geographic
footprint, especially in emerging countries (China, Turkey, India), the
business group has been strongly affected, from the 4th quarter of
2008 by the deteriorated economic environment. This was amplified
by a related de-stocking across its value chain. Reacting quickly, all
the business group’s activities reduced and rationalized their output
in order to cut their inventories and adapt to the low level of demand
through short-time working, plant mothballing or shut-downs.
Since the end of 2009, the Business Group has benefited from
improved economic conditions world-wide and from the rebuilding
of inventories at its direct customers and downstream. The rebound
of industrial equipment activity across all areas in Asia (mainly China),
the US and Europe (part of it being export-driven) sustained the
Business Group’s growth over 2010. This being said, 2010 sales
volumes for the Business Group, although growing sharply compared
to 2009 remain below what they were in 2008.
The four activities of the Business Group can now rely on its
innovation centers such as the Center for Abrasives and Refractories
Research and Development (C.A.R.R.D, Austria), the Graphite &
Carbon R&D center in Bodio (Switzerland) and the new Ceramics
Center inaugurated in Limoges (France) in 2009.
Minerals for Ceramics, Refractories, Abrasives & Foundry sales for
the year ending December 31, 2010 totaled €1,105.0 million, which
represents 32% of Imerys consolidated sales.
The business group has 104 industrial sites in 24 countries.
2010 sales: €1,105 million
29%
8%
27%
36%
Fused Minerals
Minerals for Refractories & Oilfields
Graphite & Carbon
Minerals for Ceramics
5,664 employees as of December 31, 2010
30%
7%
31%
32%
Fused Minerals
Minerals for Refractories & Oilfields
Graphite & Carbon
Minerals for Ceramics
(€ millions) 2010 2009 2008 (1) 2007 (1)
Sales 1,105.0 794.5 1,159.9 1,051.2
Current operating income 134.6 44.0 127.8 146.9
Margin 12.2% 5.5% 11% 14%
Booked capital expenditure 63.0 46.0 70.4 78.2
(1) The financial component of net expenses for defined benefit plans for employees, are now recorded under financial income/expense from January 1st, 2009.
2007 and 2008 financial data have been restated to take into account those organizational and presentation changes.
For more information, refer to chapter 2, paragraph 2.1.3 of the Registration Document.
17IMERYS 2010 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP
1
Minerals for Ceramics, Refractories, Abrasives & Foundry
1.4.1 BUSINESS GROUP OVERVIEW
Activity Products Main applications Markets Market Positions (1)
MINERALS
FOR CERAMICS
Chamottes
Clays
Derived colours
Feldspar
“Grès de Thiviers”
Ground silica
Halloysite
Kaolin
Natural colours
Pegmatite
Prepared bodies & glazes
Quartz
Ceramics
Electro-porcelain
Glazes & engobes
Sandstone
Raw materials for bodies
Raw materials for frits, glazes
& engobes
Stains for tiles
& porcelain
Sanitaryware
Tableware
Floor & wall tiles
Electro-metallurgy
Flat glass & container
World #1
in raw materials & ceramic
bodies for sanitaryware
European #1
in raw materials and ceramic
bodies for porcelain
European #2
in raw materials for floor tiles
MINERALS
FOR REFRACTORIES
& OILFIELDS
Alumina
Andalusite
Ball clays
Bauxite
Bentonite
Chamottes
Metakaolins
Silica
Oilfield Minerals (Bentonite, Calcium
carbonate, Diatomite, Graphite,
Metakaolins, Mica, Perlite)
Refractories
Foundry
Oilfield services applications
Steel
Aluminium
Electronics
Construction
Cement
Glass
Oilfield drilling fluids
Oilfield cementing
World #1
in alumino silicate minerals for
refractories
FUSED MINERALS
Fused mullites
Fused spinels
Fused aluminum oxides
Fused magnesium oxides
Fused zirconia
Silicon carbide
Zirconia chemicals
Zircon flour
Zircon opacifier
Surface treatment
Sand blasting
Refractories
Advanced ceramics
Heating elements
& friction
Ceramics
Foundry
Automotive
Machinery
Aerospace
Construction
Steel
Domestic appliances
Industrial applications
World #1
in minerals for abrasives
World #1
in fused zirconia
GRAPHITE & CARBON
Carbon black
Cokes
Dispersions
Natural graphite
Silicon carbide
Synthetic graphite
Powders
Blends
Aqueous dispersions
Additives
Mobile energy
Engineering materials
Carbon additives for polymers
Metallurgy
Hot metal forming
World #1
in high performance graphite
powders
(1) Imerys estimates.
1.4.2 MINERALS FOR CERAMICS
Through an extensive and diversified portfolio of raw materials,
ceramic bodies and glazes, the Minerals for Ceramics activity
provides customers with tailor-made mineral solutions. In a highly
technical field, developing partnerships with customers is essential
to provide minerals and solutions to the tableware, sanitaryware,
f loor and wall tiles, glass, f iberglass, electro-porcelain and
electrometallurgy markets.
After the inauguration of Imerys Ceramics Centre in 2009, the
Group’s research center in ceramics in Limoges (France), the
Minerals for Ceramics activity focus has been directed on finding
new mineral solutions either for existing applications or for developing
new ones. For more information on R&D and innovation, please refer
to chapter 1, section 1.8 of the Registration Document.
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PRESENTATION OF THE GROUP1Minerals for Ceramics, Refractories, Abrasives & Foundry
❚ PRODUCTS
Minerals for Ceramics have access to many high-quality raw material
reserves from its operations all over the world, in order to address
and satisfy the ever-changing needs of its markets. A number of
these raw materials have exceptional properties such as outstanding
whiteness, high mechanical strength and excellent rheology. Their
transformation processes are adapted to the requirements of specific
applications.
Raw materials, ceramic bodies & glazes
The main raw materials enhanced and marketed by the Minerals
for Ceramics activity are ball clays, kaolin, feldspar and quartz. For
a detailed presentation of these minerals, please refer to chapter 1,
section 1.3 of the Registration Document.
The activity also produces ready-to-use ceramic bodies, glazes
and engobes in spray-dried granulate and slurry (1) form. Product
formulations are prepared with a combination of different raw
materials according to the specific needs of the customer.
Applications
Minerals for Ceramics offers premium-quality raw materials and
ceramic bodies that are marketed worldwide, primarily in Europe,
the Middle East, North Africa, Asia and North America.
Applications include:
Floor and wall tiles
The business offers a large range of raw materials for tile bodies,
frits (2), glazes and engobes.
Manufacturing floor or wall tile bodies requires primarily ball clays,
feldspars, sands, feldspathic sands and white kaolins. Imerys
Ceramics supplies all these products to the main tile manufacturers
around the world, with blending plants strategically located in
Castellón (Spain), Modena, Ravenna (Italy).
In glazed tile applications, tiles are decorated by adding glazes
and engobes to the surface of the body. Most of the raw materials
required - ground silica and ground fluxes (3), kaolins and ball clays
- are produced by Imerys. The product offering now includes
potassium feldspar for frits. Through its Fused Minerals activity,
Imerys also offers worldwide innovative solutions to color makers
supplying the tiles industry. Imerys Astron China sells fused zirconia
and zircon flour and opacifier to ceramics frits and glazes producers
in China. Combining the raw materials sourcing power of Minerals
for Ceramics with the market know-how of Fused Minerals creates
opportunities for tile manufacturers.
Natural pigments are used to stain floor and wall tiles. Imerys
Ceramics offers the widest range of pure or blended natural colours
for use in body stains, with the naturally red color “Grès de Thiviers”
for the “cotto style” and other minerals for earthy shades adapted
to the trend for natural and modern tones. Imerys Ceramics is also
developing colouring solutions to rival synthetic products.
Sanitaryware
The business offers a complete package of mineral products which
is the largest available to the global sanitaryware market. The ball
clay portfolio includes the English clays renowned for their unique
properties, thanks to active organics, as well as local products from
three continents. The chamotte range includes standard, refined
and high dilatometry options, while the kaolin portfolio covers the
broadest range of casting properties for sanitaryware. For prepared
bodies, three plants were dedicated including fine fireclay specialists
based in the Civita Castellana region of Italy. Finally, the feldspar
portfolio consists of products from three continents.
Sanitaryware applications include vitreous china and fine fireclay,
produced by conventional or pressure casting techniques. Ongoing
investment into product development is key to maintaining Imerys
leadership in the market for both raw materials and full prepared
bodies, with breakthrough innovations for the fine fireclay segment.
Tableware
For tableware applications, the activity offers a comprehensive range
of raw materials, ceramic bodies and glazes suitable for all types
of high-quality white ware including porcelain, bone china, vitreous
china, stoneware and earthenware. The raw materials are well-known
for their consistency, mechanical strength and plasticity. In addition,
the low levels of iron oxide and titania promote exceptional whiteness
and translucency, which are crucial properties in this market. The
ceramic bodies are suitable for forming techniques ranging from
isostatic pressing and jiggering to pressure casting and conventional
casting. The tableware business has been working on a customer-
centred approach with many of the body and glazes being bespoke
developments to meet customers’ exact requirements.
The product range also includes bodies and raw materials for
electrical porcelain.
Other markets
In addition to serving the traditional ceramics market, the Minerals for
Ceramics activity also capitalizes on its key minerals and technical
expertise to address a number of adjacent markets.
(1) Slurry: a mixture of water ceramic powder and various additives (e.g., dispersant) used in the processing of ceramics.
(2) Frits: a ceramic composition that has been fused, quenched to form a glass, and granulated. The heat welds the grains together, making the piece cohesive.
(3) Fluxes: Feldspar family product.
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Fiberglass: Imerys Ceramics produces a ir-f loated and
water-washed kaolins specifically developed for the fiberglass
market. These products have high levels of alumina and low levels
of iron and alkali, ensuring that fiberglass products are resistant to
chemical and physical attacks.
Electrometallurgy: Imerys mines high-purity quartz (> 99.8%
silica), the basic raw material for silicon, an essential component
of aluminum-based alloys, silicone and silane chemistry. Quartz
pebbles are also processed for the production of ferroalloys and
ferro-silicon, used in special steel alloys.
Flat and container glass: The properties of Imerys’ feldspars make
it possible to melt quartz at a lower temperature and to control the
viscosity of glass during manufacturing. The feldspar’s alumina
content gives the finished products firmness, flexibility, cohesion
and chemical resistance.
Electroporcelain: Imerys Ceramics offers a comprehensive range of
consistent high performance raw materials and bodies for electrical
porcelain applications. The Imerys Hymod product range of strong,
plastic clays are especially valuable in the production of high voltage
electro porcelain insulators as they offer a high modulus of rupture,
high plasticity and stability.
Processing solutions: In addition, Imerys Ceramics also offers a
variety of tailored grinding and milling solutions to process hard and
soft industrial minerals at its European production sites (France and
Spain).
❚ MARKETS
Market trends
Thanks to its unique products, the Minerals for Ceramics activity
serves global customers and local producers in each region, mostly
Europe and North America. Industrial presence in Asia is still limited
due to the current state of fragmentation of mineral resources and
customers.
Ceramics markets (especially sanitaryware and tiles) are mostly
construction-related (new-build and renovation) and prominent in
the United States and Europe. The strategic positions of the Minerals
for Ceramics business relies on growing production areas, such as
Middle East, North Africa and Southeast Asia.
After being seriously impacted by an extended slow-down from the
end of 2006 in the United States and later on in 2008 for European
countries, markets deteriorated again in 2009. The Minerals for
Ceramics activity started to recover in 2010, and took advantage
of some limited restocking in mature economies. Going forward,
overall growth in Ceramics markets should be more likely dependant
on emerging economies. Efforts to diversify Minerals for Ceramics
beyond the traditional ceramics markets are ongoing, especially in
fiberglass.
Main competitors
Sibelco group (Belgium); Kaolin AD (Bulgaria); Lasselsberger and
Sedlecky Kaolin (Czech Republic); Soka (France); AKW, Stephan
Schmidt (Germany); Gruppo Minerali Maffei (Italy); Mota (Portugal);
Burella and Ecesa (Spain); Goonvean (United Kingdom); Unimin and
Chemical Lime (United States) and various local feldspar (Turkey)
or clay (Ukraine) producers.
❚ INDUSTRIAL FACILITIES, QUALITY AND SALES ORGANIZATION
Industrial facilities
Minerals for Ceramics has 61 industrial facilities located as follows:
Europe Americas Asia-Pacific
Kaolin 6 2 3
Clays 10 2 1
Ceramic bodies 10 1
“Grès de Thiviers” sandstone 1
Feldspar & feldspathic sands 7 3 2
Mica 2 2
Quartz 4
Milling & blending plants 5
Quality
The activity is firmly committed to quality improvement: 33 industrial sites out of 61 are certified ISO 9001.
20 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Minerals for Ceramics, Refractories, Abrasives & Foundry
1.4.3 MINERALS FOR REFRACTORIES AND OILFIELDS
Resulting from a series of acquisitions, the Minerals for Refractories
and Oilfied Services activity was built over the past 20 years. It is
comprised of all the activities in the production and conversion of
raw materials for acid and basic refractories, in which the Group has
a front-rank global position.
In 2010, the activity improved the industrial efficiency of its operations,
particularly chamottes in the USA and andalousite in South Africa.
Meanwhile, the andalusite business enforced its competitive position
in China with the commissioning of a new plant increasing its already
existing production capacities.
The Minerals for Refractories activity integrated in 2010 Imerys
activities in the Oilfield Services industry in 2010, becoming Minerals
for Refractories and Oilfield Services. This activity was created in
2009 to coordinate Imerys minerals offering for the oil & gas industry.
To strengthen its positions, the activity pursues an active innovation
policy through the Center for Abrasives and Refractories Research
and Development (C.A.R.R.D) located in Villach (Austria) which
has been involved in developing new products with improved
functionalities. For more information, please refer to chapter 1,
section 1.8 of the Registration Document.
❚ PRODUCTS
The products made by Minerals for Refractories result from the
transformation of silico-aluminous minerals. They are used by the
refractory industry for their mechanical strength, chemical resistance
and thermal properties.
Raw materials and derived mineral products
Raw materials for acid refractories contain alumina and silica. The
Minerals for Refractories & Oilfields activity has several very high
quality silico-aluminous deposits around the world:
p andalusite in Glomel (France), South Africa and Xinjiang (China);
p kaolins from Cornwall (United Kingdom), Georgia and Alabama
(United States);
p clays and metakaolins in Clérac (France);
p chamottes in Clérac (France) and Vatutinsky (Ukraine).
After processing, the activity offers the widest range of quality
refractory products, some of which are manufactured by other Imerys
activities: mullite from Georgia (United States), chamottes (France,
Ukraine), calcined kaolin (Molochite™), andalusite, clays (France),
fused silica, fused alumina, fused zirconia, spherical silica, tabular
alumina, bauxite and silicon carbide.
For a detailed presentation of these minerals, please refer to
chapter 1, section 1.3 of the Registration Document.
Applications
Refractory materials are materials that, as such or calcined, resist
extreme temperatures (> 1,500°C) under harsh physical and chemical
conditions.
The main applications for refractory and oilfields minerals are:
p refractories for the steel, glass, cement and aluminium industries;
p kiln furniture for the ceramics industry;
p investment casting;
p electronic components;
p oilfield services.
Minerals for Refractories and Oilfields activity can draw full benefit
from its specific strengths in providing products with increasingly
stringent technical requirements. Imerys can bring its technical and
formulation expertise into play for the very high-precision products
with flawless quality required in segments, such as minerals for
electronic component manufacturing and investment casting (e.g.
fused or spherical silica).
Each entity in the Minerals for Refractories and Oilfields activity
specializes in the production and marketing of specific minerals,
with global coordination:
p C-E Minerals, Inc. (United States) is the world leader in the
production and supply of industrial refractory minerals, including
Mulcoa®, a mullite with high alumina content; white fused
alumina; Teco-Sil® fused silica; Teco-Sphere® spherical silica;
Alpha Star®, a high density refractory bauxite; brown fused
alumina, silicon carbide and tabular alumina for refractory
products; electronic components and investment casting.
Sales organization
The Minerals for Ceramics activity has strategic commercial bases
worldwide and its products are marketed either by its own sales
teams or by its networks of independent agents or distributors, and
started to benefit from Imerys Astron China local distribution network
in China in 2010.
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p Chamottes Europe is the business unit consolidating the
following activities:
• AGS (France), the European leader in calcined clay production.
The wealth and variety of Charentes basin clays (France),
together with conversion processes, result in a wide product
range (clays, pulverized clays, calcined clays, metakaolins
and chamottes) sold to many sectors of business, including
refractories, sanitaryware, floor tiles, glue, rubber, fertilizer and
concrete;
• Vatutinsky (Ukraine) is the specialist in low and medium alumina
content chamottes (calcined clays) for refractory sectors, serving
mainly Eastern European markets (including Ukraine and Russia);
• Molochite™, produced by Imerys Minerals Ltd (United
Kingdom), is a unique abrasion-resistant alumino-silicate
refractory aggregate obtained by calcining specially selected
kaolins. MolochiteTM is used predominantly in kiln furniture,
investment casting and special refractory products.
p Damrec (France), with mineral deposits in France, South Africa
and China, is not only the world’s largest producer of andalusite,
a silico-aluminous mineral used primarily in steelmaking, but
also in the aluminum, glass and cement industries. Damrec
offers a complete line of products under the brands DurandalTM,
KerphaliteTM, KersandTM, KrugeriteTM, PurusiteTM and RandalusiteTM.
p Ecca Holdings (Pty) Ltd and Cape Bentonite (Pty) Ltd are
South African producers of chamottes, ceramic clays and
bentonite. Bentonite is used primarily in the casting, pelletizing,
drilling mud and environmental fields. Ceramic clays are sold to
the local South African market, chiefly for floor tiles.
p the Oilfield Minerals business unit: taking advantage of the wide
range of properties provided by the portfolio of Imerys’ minerals
(including bentonite, calcium carbonates, mica, metakaolins,
graphite, diatomite, perlite), the Oilfield Minerals business unit
coordinates sales into this market and explores the potential for
leveraging the Group’s existing assets and technical know-how
to grow new business.
❚ MARKETS
Market trends
Until September 2008, the high level of steel demand sustained the
activity of the Minerals for Refractories and Oilfields, but suddenly
dropped significantly in the 4th quarter and continued along 2009 with
the economic downturn. Steel production (the underlying business
indicator for the activity) in Western Europe and North America
decreased respectively by - 30% and - 34% (1)). In 2010, refractory
markets benefited from the improvement of steel production in
mature economies all over the year (+ 26% in Western Europe
and + 37% in North America) and from some inventories build-up
downstream across the customers’ chain. Projects related to other
segments such as aluminium, glass and cement industries remained
limited in 2010.
(1) Source: IISI: International Iron & Steel Institute.
Steel production in Europe and in North America (1)
(in thousands of metric tons)
0
10,000
20,000
5,000
15,000
European Union (27 countries) North America
Oct
. 07
Dec
. 07
Feb.
08
April
08
June
08
Aug.
08
Oct
. 08
Dec
. 08
Feb.
09
April
09
June
09
Aug.
09
Oct
. 09
Dec
. 09
Feb.
10
April
10
June
10
Aug.
10
Oct
. 10
Dec
. 10
EU (27 countries) + 26% NA: + 37% 2010 vs. 2009
EU (27 countries) - 13% NA: - 11% 2010 vs. 2008
22 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Minerals for Ceramics, Refractories, Abrasives & Foundry
Main competitors
Various local producers in China, Central Europe, South America and South Africa.
❚ INDUSTRIAL FACILITIES, QUALITY AND SALES ORGANIZATION
Industrial facilities
Minerals for Refractories and Oilfields activity has 20 industrial facilities as follows:
Europe AmericasAsia-Pacific
& Africa
Fused silica 1
Bauxite sizing 1 1
Andalusite 1 7
Bentonite 2
Refractory clays & Chamottes 3 1
Mullite 1
Fused white alumina 1
Molochite™ 1
1.4.4 FUSED MINERALS
The Fused Minerals activity results from the acquisitions of Treibacher
Schleifmittel in 2000, UCM in 2007 and Astron China in 2008. The
activity now operates from industrial facilities in China and in the
United States, in addition to a strong presence in Europe, and has
a wide range of products (fused aluminium oxide, fused magnesia,
fused zirconia) sold to end-markets such as abrasives, refractories,
heating equipment and ceramics.
In 2010, Imerys Astron China became the business group’s
distribution network in China for Imerys minerals sold into ceramics,
refractories and foundry markets, relying on its different offices
covering the main industrial areas of the country, with a view to
extend the Business Group presence in this fast growing part of
the world.
The unique know-how and Research & Development capabilities,
within the C.A.R.R.D., allow for the development of new mineral
solutions and innovations. For more information, please refer to
chapter 1, section 1.8 of the Registration Document.
❚ PRODUCTS
Raw materials and derived mineral products
Raw materials transformed by the activity are bauxite, alumina,
magnesia and zircon sand, purchased outside the Group. After
complex processing operations, they are transformed into various
grades of high-performance materials.
Fused aluminum oxide
Through the Treibacher Schleifmittel group of companies, this
activity converts calcined bauxite and alumina into high-performance
materials (fused aluminum oxide grains) that offer superior hardness,
mechanical strength, thermal stability and chemical resistance. These
products, also known as corundum, are obtained by fusing alumina
or bauxite in an electric arc furnace. During fusion, the physical and
chemical characteristics of the aluminum oxide are transformed,
resulting in higher density and different crystal structure and size.
Quality
14 plants are certified ISO 9001.
Sales organization
The Minerals for Refractories and Oilfields various entities are
supported by common sales and distribution networks in order to
serve its markets worldwide.
Europe Commerce Refractory (Luxembourg) is the agent for the
Group’s minerals on European refractories markets. European
foundry markets are served through a specific internal sales
structure, Imerys Foundry Minerals Europe (IFME). In the United
States, products are sold directly through C-E Minerals.
In Japan, Imerys Refractory Minerals Japan KK is now acting
as the sole sales channel to Japanese refractory producers for
C-E Minerals, Damrec and MolochiteTM.
The commercial organizations of acquired companies in China and
Ukraine are being used as a base for common sales networks serving
refractory producers in those countries, including Imerys Astron
China local distribution network for China, since 2010. In India, an
internal dedicated sales structure, Imerys Refractory Minerals India
(IRMI), is in place.
These networks generally also market the products of other Imerys
activities that are sold in the refractories industry (e.g. fused alumina
and fused zirconia).
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Fused zirconia and zircon related products
The activity, structured around UCM and Imerys Astron China,
converts zircon sand in an electric arc furnace into various grades
of fused zirconia. After cooling, crushing and screening, the product
takes the form of accurately sized grains or fine powders ranging
from several millimeters down to less than one micron. Imerys Astron
China also transforms zircon sand into zirconia chemicals through a
complex chemical process. Zircon sand is also milled and processed
into flour and opacifiers for the Chinese ceramics industry.
Fused magnesia
With UCM, the Fused Magnesia business converts magnesia into
high purity fused magnesium oxide with characteristics that ensure
low electrical leakage, good thermal performance and good physical
properties for filling heating elements. During fusion, the physical
characteristics of magnesia are transformed, resulting in higher
density and an optimum crystal structure.
For a detailed presentation of these minerals, please refer to
chapter 1, section 1.3 of the Registration Document.
Applications
Fused aluminum oxide
Because of its wear resistance and thermal properties, fused
aluminum oxide is widely used as an abrasive and in the refractory
industry. The materials are dif ferentiated by their chemical
composition and particle size distribution. A distinction is made
between macro-grains and micro-grains (bigger or smaller than
70 microns, respectively).
Markets for fused aluminum oxide products cover the following
applications: bonded abrasives such as grinding and cutting wheels,
segments, honing stones, etc.; coated abrasives, such as sand
paper, fiber discs and grinding belts; sand-blasting; monolithic and
shaped refractory products, and various other applications, such as
laminates, ceramics, lapping and surface treatment.
Fused zirconia and zircon related products
Fused zirconia is used as a high-value raw material in the refractories,
friction, advanced ceramics and other industries:
p Refractories: the principal refractory application for fused
zirconia is in the continuous casting process for steelmaking.
Zirconia is used for the critical areas of the tubes and valves used
to control the flow of liquid steel into the mold at temperatures in
excess of 1,600°C.
p Friction and automotive brake pads: micron-sized zirconia is
used as an additive to brake pads where it helps to modify friction
characteristics and reduce brake pad and rotor wear.
p Advanced ceramics: sophisticated grades of fused zirconia in
very fine sizes, typically with an average particle size of less than
one micron, have applications in a range of advanced ceramics
e.g. oxygen sensors for engine management systems and for
Solid Oxide Fuel Cells.
p Ceramics: zircon sand milled below 45 microns is used as flour
or as opacifier in the ceramics industry, as coat in the investment
casting industry, or as a raw material in refractory applications.
p Other industries: zirconia chemicals, particularly zirconium basic
carbonate, are used as raw materials in different applications,
such as antiperspirants, paint driers, coatings and catalysts.
Fused magnesia
Because of its electrical and thermal properties, electrical grade
fused magnesium oxide is widely used in the production of both
domestic and industrial heating elements e.g. in domestic appliances
such as cookers, dishwashers, washing machines, etc.; heating in
industrial applications such as galley products, railway heating,
industrial boilers; in automotive applications such as diesel engine
glow plugs and friction products and in refractory applications for
induction furnace linings.
❚ MARKETS
Market trends
Overall, markets for Fused Minerals were dynamic worldwide until
the summer of 2008, driven by high steel production, and, especially
in China, by the preparation of the Olympic Games. All markets and
applications had suffered from a sudden drop in demand since the
4th quarter of 2008, in particular due to the low level of steel and
automotive/machinery production, as well as reduced construction
activities. After a significant destocking period, markets started
to gradually recover towards the end of 2009. China was the first
market to start growing after the recession, in particular thanks to the
government stimulus package. Imerys Astron China, being focused
on the domestic market, benefited the most from this situation.
All three businesses (alumina, zirconia, magnesia) experienced
similarly in 2010 a strong volumes recovery driven by the worldwide
economic growth. After 2009 which was heavily impacted by a large
de-stocking along the distribution channels, the Fused Minerals
activity benefited in 2010 from the rebuilding of inventories of
customers along with some market share gains.
Main competitors
p Fused aluminum oxide: Rio Tinto Alcan (France); Motim (Hungary);
Zaporozhye Abrasives (Ukraine); Washington Mills (United States);
Almatis (Europe, United States) and various Chinese producers.
p Fused zirconia and zirconia related products: AFM (Australia);
Asia Zirconium (China); Tosoh (Japan); Foskor (South Africa); Saint
Gobain (United States, France, China); MEL (United Kingdom and
United States) and various Chinese producers.
p Fused magnesia: Tateho (Japan); Penoles (Mexico) and various
Chinese producers.
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PRESENTATION OF THE GROUP1Minerals for Ceramics, Refractories, Abrasives & Foundry
❚ INDUSTRIAL FACILITIES, QUALITY AND SALES ORGANIZATION
Industrial facilities
Fused Minerals has 16 industrial facilities located as follows:
Europe Americas Asia-Pacific
Fused Aluminum Oxide 5 2 2
Fused Zirconia 1 1 3
Fused Magnesia 1 1
One of the fused zirconia industrial location previously mothballed has been restarted in China in 2010, whereas a Chinese plant of fused
aluminium was shut-down in 2010.
Quality
7 industrial sites are certified ISO 9001, as well as the Center for
Abrasives and Refractories Research and Development (C.A.R.R.D.).
The C.A.R.R.D is a high-technology certified center in Austria.
Sales organization
Minerals of the activity are marketed through the activity’s own
network of distribution units (including direct sales, as well as agents
and distributors) located and focused on each of its main markets.
1.4.5 GRAPHITE & CARBON
Through the large geographic presence of Timcal (North America,
Europe, Asia), Imerys’ Graphite & Carbon activity is a world leader
in technical applications for high-performance graphite and carbon
black, providing its global markets with a full range of carbon-based
solutions and related services.
In fast moving and high-tech markets, Timcal’s Research &
Development effort is key to provide customers with new innovative
solutions. More details are given in chapter 1, section 1.8 of the
Registration Document.
❚ PRODUCTS
Timcal’s main product families are:
p synthetic graphite, produced in Switzerland through a complex
process of baking petroleum coke at very high temperatures;
p conductive carbon black, sold as powder or granules;
p natural graphite flakes, produced in Lac-des-Îles (Canada),
the largest graphite mine in North America; processed natural
graphite; graphite dispersions, sold in various forms such as
additives, powders, blends or aqueous dispersions;
p silicon carbide.
For a detailed presentation of these minerals and derived mineral
products, please refer to chapter 1, section 1.3 of the Registration
Document.
Applications
The Graphite & Carbon activities are strictly market-driven, ensuring
high-quality products and services for their customers in every
application field.
p Mobile energy: this sector covers alkal ine batter ies,
Zn-C batteries, Lithium-ion rechargeable batteries (for mobile
electronic devices), fuel cells (systems for converting chemical
energy into electricity through a continuous fuel supply), super-
capacitors and can coatings. In the fiercely contested portable
energy market, Timcal is the world leader due to the variety of its
products, which range from graphite and carbon black powders
to conductor coatings for battery cans. The use of an electrode
containing graphite or carbon black makes lithium-ion batteries
safer and more efficient. Fuel cells are still requiring new graphites,
carbon blacks and technically advanced graphite dispersions.
p Engineering materials: thanks to unique combinations of
synthetic and natural graphite, tailor-made solutions are provided
by cutting-edge graphite processing facilities that deliver the
required physical and chemical characteristics and a high
standard of service. In the automotive industry, outlets are friction
pads, clutch facings, seals, iron powder metallurgy, carbon
brushes and foils. Other applications include sintered ceramics,
hard metals, pencil leads, powders for lubricants, catalysts and
synthetic diamonds.
25IMERYS 2010 REGISTRATION DOCUMENT
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p Additives for polymers: with the highly conductive carbon
black and synthetic graphite product famil ies, Timcal
addresses the niche market of conductive polymers with
applications in conductive coatings, plastics & resins, PTFE
(Polytetrafluorethylene) elastomers, rubber, cables and flame
retardants.
p Hot metal forming: in a sector that is heavily dependent on the
oil drilling business, Timcal’s leadership is based on its extensive
knowledge of graphite dispersions for hot metal forming,
descaling agents, casting and related application systems.
p Refractories and metallurgy: a significant outlet for natural
graphite, with bricks, monolithics, carbon raisers and hot metal
topping.
❚ MARKETS
Market trends
Markets were negatively affected by the global economic slowdown
that has prevailed since the end of 2008. In the first half of 2009,
substantial demand decline was intensified by continued inventory
reduction. General demand levels recovered moderately in the
second half of 2009, especially in Asia-Pacific and in Mobile Energy
segment.
During 2010, all the markets addressed by the Graphite & Carbon
activity gradually recovered to the demand level experienced in
2007 and 2008, thanks to an improved business environment in
automotive, consumer electronics and steel manufacturing end
markets and to some restocking. From a regional perspective, the
growth in the emerging regions of Asia-Pacific remained considerably
higher than other developed areas of the world.
Main competitors
Cabot (Belgium); Nacional de Grafite (Brazil); Degussa, Kropfmühl
(Germany); Nippon Kokuen, Chuetsu (Japan); Asbury, Columbian,
Superior Graphite (United States) and many Chinese producers.
❚ INDUSTRIAL FACILITIES, QUALITY AND SALES ORGANIZATION
Industrial facilities
The Graphite & Carbon activity has 7 industrial facilities located as
follows:
Europe North America Asia-Pacific
2 2 3
Quality
6 industrial sites are certified ISO 9001.
Sales organization
Timcal is well represented around the globe by its own experienced
sales and technical teams, which are organized by geographic region.
In areas where Timcal does not have its own representation, selected
agents are in regular customer contact. This global representation
provides customers with constant support, ensuring that adequate
product solutions can be found quickly to meet their requirements.
26 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Performance & Filtration Minerals
The Performance & Filtration Minerals business group comprises of
two main families of minerals, which are presented in the sections
hereafter:
p Performance Minerals;
p Minerals for Filtration.
The global Performance & Filtration Minerals business group provides
customers with tailor-made solutions in highly technical fields where
chemical composition, morphology, mechanical properties, thermal
and chemical resistance, as well as food and pharmaceutical grade
processing are key requirements. Based on the transformation of
a large range of extensive, high quality mineral reserves (kaolins,
carbonates, feldspar, mica, ball clays, diatomite, perlite and
vermiculite), as well as expertise in all the techniques needed for
processing, it offers a wide variety of products. The development
of strong relationships with customers is essential for value-added
niches.
Thanks to the often complementary properties of minerals from both
activities, the business group is well poised to serve its common
customers. Collaboration and resource-sharing take place across
these activities on a case-by-case basis, leveraging synergies to
deliver unique product offerings to the following final markets:
p Construction: home or commercial buildings use materials such
as decorative or insulating paints, fencing, electrical cables made
of plastics, rubber carpet backings, adhesives, sealants whereas
infrastructure construction need road paintings, etc;
p Consumer goods: food & beverage, cosmetics, pharmaceutical
& nutraceuticals, personal care products such as toothpaste,
soap etc;
p Industrial products: high technical plastics, painting for large
equipment or pieces etc.
The business group has been strongly affected by the downturn
of its underlying markets, accelerated, in 2009, by the decrease of
inventories in value chains downstream. In 2010, markets recovered
at various speeds, with a subsequent rebuilding of inventories.
Performance & Filtration Minerals’ sales for the year ending
December 31, 2010 totaled €594.7 million, which represents 17%
of Imerys’ consolidated sales.
The business group has 54 industrial sites in 17 countries.
1.5 | PERFORMANCE & FILTRATION MINERALS
2010 sales: €595 million
44%
56%
Performance Minerals Minerals for Filtration
2,769 employees as of December 31, 2010
52%
48%
Performance Minerals Minerals for Filtration
(€ millions) 2010 2009 2008 (1) 2007 (1)
Sales 594.7 500.7 571.5 569.9
Current operating income 64.8 26.9 46.1 48.5
Margin 10.9% 5.4% 8.1% 8.5%
Booked capital expenditure 26.8 10.7 48.9 60.5
(1) In 2009, certain activities in Asia and South America were transferred from Pigments for Paper to Performance & Filtration Minerals. Additionally, the financial
components of net expenses for defined benefit plans for employees are now recorded under financial income/expense from January 1st, 2009. 2007 and 2008
financial data have been restated to take into account those organizational and presentation changes.
27IMERYS 2010 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP
1
Performance & Filtration Minerals
1.5.1 BUSINESS GROUP OVERVIEW
Activity Products Main applications Markets Market Positions (1)
PERFORMANCE
MINERALS
Ball clays
Dolomite
Feldspar
GCC
Kaolin
Mica
PCC
Functional additives for:
Sealants
Adhesives
Paints
Coatings & Construction
materials
Plastics & Films
Catalyst substrates
Rubber
Agriculture
Food
Construction
Automotive
Pharmacy & Personal care
World #1
in minerals for breathable
polymer films
World #1
in mica
World #1
in mica for engineered plastics
and high performance coatings
MINERALS
FOR FILTRATION
Diatomite
Expanded perlite
& Perlite ore
Structured alumino-silicate
Vermiculite
Filter aids for:
Beer, Fruit juice
Edible oils
Food
Chemistry
Pharmaceuticals
Sweeteners
Water, Wine
Food & Beverages
Pharmaceuticals
& Chemicals
World #1
in diatomite-based products
Functional additives for:
Agriculture
Polymers
Rubber, Polishes
Paint, Composites
Cosmetics,
Catalysts
Insulation, Cryogenic insulation
and Soundproofing
Roofing
Refractories
Brake linings
Paper
Polymer films
Agriculture
Food & Beverages
Pharmaceutical
& Chemicals
Construction
Automotive
World #1
in diatomite-based products
and perlite-based products
for filtration
(1) Imerys estimates.
1.5.2 PERFORMANCE MINERALS
Thanks to a broad portfolio of raw materials providing a
comprehensive range of properties, Performance Minerals
addresses niche markets in which additional performance is key.
In-depth formulating know-how and Research & Development
capabilities allow for the development of new mineral solutions
bringing value to customers and reduce environmental footprint of
their own products. For more information on R&D and innovation,
please refer to chapter 1, section 1.8 of the Registration Document.
Over the past years, the Performance Minerals activity developed
its range of high-quality raw materials and expanded its geographic
presence all around the world.
❚ PRODUCTS
Raw materials
Raw materials have differentiated chemical composition, particle size
distribution, shape and exceptional properties such as outstanding
whiteness, high mechanical strength and excellent rheology. Based
on in-depth knowledge of these industrial minerals’ properties,
production processes are adapted to the requirements of specific
applications in order to satisfy the ever-changing needs of their
customers.
Performance Minerals activity makes its products from kaolin, ground
calcium carbonate (GCC), precipitated calcium carbonate (PCC),
mica, feldspar and ball clays.
For a detailed presentation of these minerals and products, please
refer to chapter 1, section 1.3 of the Registration Document.
28 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Performance & Filtration Minerals
Applications
Performance Minerals are processed and marketed worldwide.
They are added to intermediary or finished products to deliver higher
functionality and processability, and to reduce total raw material
costs.
Applications include:
p Paints & coatings: an extensive range of kaolins, calcium
carbonates, mica and feldspar, are used as extenders to improve
paint quality and opacity;
p Plastics, films and polymer packaging: the development of
more and more sophisticated applications means that increasingly
demanding requirements are placed on functional fillers and the
specific properties they impart. Imerys has an excellent range of
high-quality mineral extenders at its disposal including calcium
carbonates, kaolins and micas;
p Rubber: kaolins, ball clays, calcium carbonates and feldspars
are used in many rubber applications. Imerys’ range of white
pigments delivers good processability, chemical resistance and
barrier properties, together with good whiteness and strength
dependent on their particle size. Ball clays offer the same
properties but with a darker color;
p Sealants & adhesives: kaolins impart good barrier effects and
rheology control to adhesives and sealants. The low surface
hydroxyl content of kaolins leads to low moisture pick-up,
resulting in excellent performance in moisture-sensitive sealant
applications. Kaolins are effective as structure-building elements.
Finely ground calcium carbonates are also used in a wide range
of sealants and adhesive applications to improve rheological
properties and reduce the water or volatile content of the
compound. Some products are made hydrophobic with stearate
coating to reduce moisture pick-up, make handling easier and
improve dispersion;
p Other niche products: a wide range of minerals that enhance
the properties of products are used everyday in construction,
landscaping, drilling mud and personal care products. These
include: white marble aggregates used in coatings for swimming
pools and limestone products for lawn care; calcium carbonates
used in water treatment systems, air purification, the energy
sector and personal care products such as toothpaste and soap.
❚ MARKETS
Market trends
Performance Mineral market led by construction, industry and to
a lesser extent, by general consumption experienced the following
trends by geographic zone:
p Europe: The Performance Minerals business in Europe is
substantially linked to activity in the construction markets. The
whole sector entered into a slump in the 2nd half of 2008, which
continued throughout 2009. Construction is improving slightly in
Europe, but remained at a low level in 2010. However, other non-
construction related segments in polymers, automotive, other
industrial applications and agriculture saw a rebound.
p North America: Since the end of 2006 (see graph below), a
significant downturn affected new residential construction with
a negative impact on a number of key markets (joint compound,
roofing and PVC (1) siding, paints and coatings). Activity remained
poor throughout 2010 at historically low level, while export-
oriented industrial uses rebounded.
(1) PVC: Polyvinyl Chloride.
Quarterly single-family housing starts in the United States, annual trend
(in thousands of units)
0
500
1,000
1,500
2,000
Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08
+ 6% 2010 vs. 2009
- 35% 2010 vs. 2008
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10
Source: Census
29IMERYS 2010 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP
1
Performance & Filtration Minerals
p South America: Activity in Brazil (mostly paints and construction
related) continued to be strong in 2010.
p Asia Pacific: Strong positions in polymers and specialty rubber
applications have provided growth in Asia.
Main competitors
Sibelco group (Belgium); AKW and Dorfner (Germany); Reverte
(Spain); Omya (Switzerland); Goonvean (United Kingdom); Burgess,
BASF, Franklin Industrial Minerals, KaMin, Specialty Minerals (United
States).
❚ INDUSTRIAL FACILITIES, QUALITY AND SALES ORGANIZATION
Industrial facilities
The Performance Minerals activity has 28 industrial facilities:
Europe AmericasAsia-Pacific
& Africa
Kaolin 2 1 1
GCC 6 8 4
PCC 4
Mica 2
Quality
The Performance Minerals activity is firmly committed to quality
improvement with 22 plants certified ISO 9001.
Sales organization
Sales organization was adapted to the new geographic organization
in order to provide customers with the highest level of services.
Performance Minerals products are marketed either by the
activity’s own sales teams or by networks of independent agents
or distributors.
1.5.3 MINERALS FOR FILTRATION
The Minerals for Filtration activity, created with the acquisition of
the World Minerals group (United States) in July 2005, is the world’s
leading supplier of diatomite and expanded perlite-based products
for filtration. The activity reinforced its strength with a presence in
South America, through the acquisition of Perfiltra (Argentina), in
2007, the number one expanded perlite supplier in this high growth
region.
The Imerys Vermiculite activity is a significant supplier of vermiculite
ore. Its main deposits are located in Zimbabwe and Australia.
The Minerals for Filtration activity is very involved in R&D and
innovation which is detailed in chapter 1, section 1.8 of the
Registration Document.
❚ PRODUCTS
Raw materials
The main raw materials produced by the Minerals for Filtration activity
are diatomite, perlite and vermiculite. It also supplies other products
such as calcium silicate-based and magnesium silicate-based
products for specialty applications.
Diatomite and perlite, two natural raw materials, have exceptional
properties: low density, chemical inertness, high contact surface
and high porosity. Minerals for Filtration’s products are sought after in
many applications, particularly as filtration aids and functional fillers.
Vermiculite’s properties are a good fit with Minerals for Filtration
products in some construction, agricultural and insulation and fire
retardant applications.
For a detailed presentation of these minerals, please refer to
chapter 1, section 1.3 of the Registration Document.
Applications
p Food & Beverage filtration: diatomite and expanded perlite
have ideal shape, structure and density to be used as filtration
aids in beer, sweeteners, water, wine, green tea and edible oils.
Calcium silicate-based and magnesium silicate-based products
have valuable properties for converting liquid, semi-solid or
sticky ingredients into dry, flee-flowing powders used to make
sweeteners and flavorings due to their high surface area and
absorption capabilities.
p Pharmaceutical & Chemical fillers: diatomite is used for
its filtration capabilities and as a functional filler in cosmetics,
pharmaceuticals and chemicals. Diatomite is a key component
of the blood fractionation process worldwide. Perlite is used as
filler in dentistry. Diatomite and expanded perlite are both used
as filtration aids in bio diesel.
30 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Performance & Filtration Minerals
❚ INDUSTRIAL FACILITIES, QUALITY AND SALES ORGANIZATION
Industrial facilities
The Minerals for Filtration activity has 26 industrial facilities as follows:
Europe AmericasAsia-Pacific
& Africa
Diatomite 2 5 2
Perlite 4 10
Vermiculite 3
p Building materials: perlite and expanded perlite products contain
unique properties that make them suitable for heat and cryogenic
insulation, soundproofing, building materials, coatings (e.g. for
swimming pools) and roofing. Vermiculite is sold to the insulation,
soundproofing, fire protection and construction industries for its
light weight, heat resistance, high absorption and low density.
p Other niche products: diatomite is used in the paint, plastic
film, agriculture, polish and rubber sectors. Perlite and expanded
perlite are suitable for horticulture and lightweight refractories.
Calcium silicate-based and magnesium silicate-based products
are used to make rubber and pesticides.
❚ MARKETS
Market
Minerals for Filtration are sold worldwide to a wide range of global
and local customers. Activity varied depending upon the segments:
p Filter aid as well as personal care products followed the general
consumption trends. They were affected from the end of 2008
to the beginning of 2009 reflecting inventory throughout the
distribution chain. Levels rebounded in the 2nd half of 2009, as
the demand for filtration of food and beverage products remained
stable overall. In 2010, demand remained strong in emerging
countries and globally stable in Europe and North America.
p On the construction side, activity stabilized at a low level in Europe
and North America.
Main competitors
CECA (France); S&B Minerals (Greece); Showa (Japan); Palabora
(South Africa); Eagle Picher Minerals, Grefco (United States).
Quality
The global quality organization focuses on improving product quality
and consistency at each plant around the world. 19 facilities are
certified ISO 9001.
Sales organization
Sales organization was adapted to the new geographic organization
in order to provide customers with the highest level of services.
Minerals for Filtration products are sold through technical service
offices in its main markets and supported by an international
network of agents or distributors. Global and regional marketing
professionals provide further technical and strategic support for the
sales organization.
31IMERYS 2010 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP
1
Pigments for Paper
1.6 | PIGMENTS FOR PAPER
The Pigments for Paper business group supplies the paper industry
with kaolin and calcium carbonate - the two main processed
minerals for the paper industry. The business group has extensive,
high-quality mineral reserves of these two essential minerals for
papermaking, and has significant expertise in mineral processing
techniques. Its structure is designed to serve the needs of the
changing global paper and packaging markets. Pigments for Paper
serves more than 380 paper mills worldwide: 20% of these are in
North America, 41% in Europe and 39% in the rest of the world,
mainly Asia-Pacific, the region driving growth in the paper industry.
To provide the most suitable product offering for local needs in
paper & board manufacturing, the business group is organized into
4 geographic regions.
After the optimization of the Pigments for Paper activities in
2007 and 2008 (centered around specialization of Cornwall
(Great Britain) facilities for filler kaolin and of Brazilian operations
to coating kaolins (1)), the business group has adapted its industrial
layout in order to face the economic downturn. In 2009, production
units were idled in Europe, North America and Brazil to meet the
lower demand. In Asia, where the Group still benefited from continued
growth, two new calcium carbonates plants in India (Amritsar and
Bhadrachalam) have been commissioned.
In 2010, the Pigments for Paper industrial platform adapted to the
economic conditions in mature countries. In Asia, one new joint
venture operation was commissioned in Yueyang (Hunan province,
China) to supply PCC. In Brazil, the business group acquired Pará
Pigmentos S.A. (PPSA), as well as kaolin mining rights in Pará State.
This acquisition is a significant move in the business group strategy
to remain one of the leading suppliers of kaolin to the worldwide
paper industry.
Following a growing trend within the customer base towards the
production of specialty products, the business focuses increasingly
on renewable fiber-based packaging. To reflect this trend, the
Pigments for Paper business group changes its name, in 2011, to
Paper & Packaging. Technical & development resources are being
directed to support this effort.
For the year ending December 31, 2010 Pigments for Paper sales
totaled €767.1 million, which represents 23% of Imerys’ consolidated
sales.
The Business Group has 47 industrial sites in 19 countries.
2010 sales: €767 million
18%
8%
46%
28%
Europe
Asia-PacificNorth America
South America
2,364 employees as of December 31, 2010
22%
37%
30%
11%
Europe
Asia-PacificNorth America
South America
(€ millions) 2010 2009 2008 (2) 2007 (2)
Sales 767.1 631.9 719.2 793.5
Current operating income 76.0 41.6 60.2 84.4
Margin 9.9 % 6.6 % 8.4 % 10.6 %
Booked capital expenditure 60.6 32.5 62.3 174.1(1)
(1) €100 million of capital expenditure required for optimization of the industrial layout in 2007 and 2008 (transfer of coating kaolin production from Cornwall to Brazil,
upgrade of Cornwall facilities dedicated to filler kaolin to improve energy efficiency, building of a new logistics platform in Antwerp to distribute Brazilian kaolin to
Europe).
(2) In 2009, certain activities in Asia and South America were transferred from Pigments for Paper to Performance & Filtration Minerals. Additionally, the financial
components of net expenses for defined benefit plans for employees are now recorded under financial income/expense from January 1st, 2009. 2007 and 2008
financial data have been restated to take into account those organizational and presentation changes.
32 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Pigments for Paper
❚ BUSINESS GROUP OVERVIEW
Activity Products Applications Markets Market positions (1)
PIGMENTS FOR PAPER
Kaolin Fillers & Coatings
Graphic papers
– Printing & Writing
Coated woodfree
Coated mechanical
Uncoated woodfree
Uncoated mechanical
– Newsprint
World #1
in kaolin for paper
GCC
PCC
Fillers & Coatings
Board & Packaging
– Coated packaging
Coated bleached board
Coated unbleached kraft
Coated recycled board
– Uncoated packaging
Container board
Liner board
Corrugated medium
World #2
in GCC for paper
World #3
in PCC for paper
(1) Imerys estimates.
❚ PRODUCTS
The Pigments for Paper business group offers the world’s broadest
range of pigments for the paper and packaging industries with
hydrous and calcined kaolin, ground calcium carbonate (GCC)
and precipitated calcium carbonate (PCC), used for both filling and
coating applications. These products are differentiated by their
chemical composition, particle size distribution, shape, whiteness
and viscosity. Imerys’ minerals offer all the properties required by
the customer: not only whiteness, gloss, opacity and printability, but
also high mechanical strength and excellent rheology, which help to
optimize its customers manufacturing processes.
This unique know-how, combined with the great diversity of its
products, allows the business group to deliver a multi-pigment
response to the customer’s formulation needs, by means of the most
effective use of pigments.
Raw materials
p Kaolin: the world’s largest producer of kaolin for paper, Imerys
is the only group to be active in all three regions containing high
quality kaolin resources for paper applications. Each location
offers specific, unique geological characteristics to meet the
needs of global papermakers. Imerys’ kaolin mines and plants
are ideally located near specialized ports with optimized logistical
facilities in Brazil (Pará State), enhanced by the integration of
PPSA activities, in August 2010, the United States (Savannah,
Georgia) and the United Kingdom (Fowey, Cornwall).
p GCC (Ground Calcium Carbonate): Imerys is the second-largest
producer of GCC for paper, with processing plants located in the
world’s major paper manufacturing regions close to customers’
mills to ensure high quality service and logistical flexibility.
p PCC (Precipitated Calcium Carbonate): the world’s third-largest
producer of PCC, Imerys makes PCC from natural limestone and
provides PCC-based filler and coating pigments.
For a detailed presentation of these minerals, please refer to
chapter 1, section 1.3 of the Registration Document.
Processes
Imerys processes all of its raw minerals to obtain the properties
required by customers:
p In kaolin processing, chemical and physical purification, refining,
separation and bleaching are used to yield the desired product
properties. Calcination transforms kaolin at high temperature,
resulting in a more inert mineral that imparts different qualities to
end applications such as whiteness and opacity as well as gloss,
smoothness and printability.
p GCC is especially renowned for its high whiteness and
good rheology, and after processing, improves the physical
characteristics of finished paper and packaging products.
p PCC, produced artificially from natural limestone, delivers a
pigment with well-defined shape and size and excellent optical
properties.
Applications
After processing, kaolin, GCC and PCC are used in the paper &
packaging industries as filling and coating pigments:
p Fillers are added to the paper fiber at the beginning of the
papermaking process, just prior to the formation of the paper
web. Mineral fillers are designed to impart texture, opacity,
33IMERYS 2010 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP
1
Pigments for Paper
whiteness and printability. Filler pigments have an increasingly
important role in the success of uncoated woodfree, newsprint
and supercalendered papers, as expectations in terms of print
performance are constantly rising. The high cost of cellulose fiber
further highlights the need for filler kaolin, for both its technical
benefits and as a cost-saving measure. Facilities in the United
Kingdom (Cornwall) provide filler kaolins that are especially suited
to European supercalendered paper production, whereas GCC
and PCC fillers are needed for the production of printing paper
grades for applications requiring high whiteness;
p Coating products are used in sophisticated formulations
containing different pigments and chemical components to
achieve high levels of brightness, gloss and print performance.
They are applied to the paper surface in a thin, even film to
produce opaque, white, smooth and glossy paper. Brazilian
Capim™ (Amazon Delta) kaolins deliver outstanding whiteness
and opacity, due to their particle size distribution; they also give
excellent printability and runnability for lightweight coated (LWC)
papers. United States (Georgia) kaolins are predominantly used
for coating applications requiring high gloss and printability in the
global paper market. Additionally, Imerys provides customised
blends of kaolin and carbonate to provide tailor-made solutions
for board and packaging producers.
The business group’s formulating know-how and Research &
Development capabilities allow for the development of new mineral
solutions bringing value to customers. For more information on
Research & Development and innovation in Pigments for Paper
activities, please refer to chapter 1, section 1.8 of the Registration
Document.
❚ MARKETS (1)
The business group serves the global paper & packaging markets
comprised of worldwide producers (mainly European and North
American), major Asian paper makers and local independent
producers. Asia-Pacific continues to grow its overall share of global
printing and writing paper output.
Following the global economic downturn in 2009, where markets
suffered a - 9% decrease in production, demand recovered and
global production of printing and writing paper grew by an estimated
+ 6% in 2010. The improvement in demand and production in the
European and North American markets, favored by the depreciation
of the euro against the US dollar and the geographical mix of
activities, failed to recapture the levels of 2007/08. However, both
regions continued to restructure with selected mill closures. Printing
and writing paper markets in Asian emerging countries and South
America remained buoyant during the downturn and continued to
grow in 2010.
(1) Source: RISI (Resources Information System, Inc) and Imerys estimates.
Global printing & writing paper production (1)
(in thousands of tons)
Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08
+ 6% 2010 vs. 2009
- 4% 2010 vs. 2008
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 100
5,000
10,000
15,000
20,000
25,000
30,000
Main competitors
p Kaolin: Cadam (Brazil), AKW (Germany); BASF, KaMin and Thiele
(United States);
p GCC: Omya (Switzerland) and various local competitors;
p PCC: Minerals Technologies (United States); Omya (Switzerland).
34 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Pigments for Paper
❚ INDUSTRIAL FACILITIES, QUALITY AND SALES ORGANIZATION
Industrial facilities
The business group totals 47 industrial facilities as follows:
Europe Americas Asia-Pacific
Kaolin 1 5 1
GCC 8 2 14
PCC 1 8 3
Slurry make-down 4
Quality
The business group is involved in quality certification with 29 plants
ISO 9001 certified.
Sales organization
Pigments for Paper products are marketed through the business
group’s own sales force specializing in paper and packaging
applications.
35IMERYS 2010 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP
1
Materials & Monolithics
1.7 | MATERIALS & MONOLITHICS
The Materials & Monolithics business group is organized around the
following two activities:
p Building Materials;
p Refractory Solutions, comprised of Calderys and the Kiln Furniture
activity.
Both these activities have strong market positions that they continue
to develop through an active innovation policy and selective capital
expenditure.
With high-quality deposits and an efficient production process, the
Building Materials activity is France’s largest producer of clay roof
tiles, bricks and chimney blocks and of high-quality natural slate.
Imerys also contributes to the development of renewable energies
through photovoltaic roof tiles.
After focusing its efforts on improving the productivity of its industrial
assets and refocusing its network on the French market (divestments
of operations in Spain and Portugal mid-2007), the Building Materials
activity was affected by the slowdown of the Construction market
which began in early 2008. In 2009, industrial capacities for roof
tiles and bricks were gradually adjusted to demand, which was still
low in 2010.
Calderys, the world leader in alumino-silicate monolithic refractories,
provides services and products to the “Liquid metal” (steelmaking,
foundry, aluminum) and “Thermal” industries (cement, power
generation, petrochemicals and incineration). The Kiln Furniture
activity’s products mainly serve kiln furniture markets for ceramics
and clay roof tiles.
Calderys consolidated its world leadership with acquisitions in 2007
and in 2008 (ACE Refractories in India, B&B Refractories in South
Africa and Svenska Silika Verken AB in Sweden) and was affected by
the difficult economic context in 2009. In 2010, business improved
in most countries where the Group operates, thanks to a significant
upturn in steel production, which did not, however, regain pre-crisis
levels.
The Materials & Monolithics business group’s sales for 2010 totaled
€922.6 million, contributing 28% of the Group’s consolidated sales.
The business group has 40 industrial sites in 16 countries.
2010 sales: €923 million
44%
56%
Building Materials Refractory Solutions
4,028 employees as of December 31, 2010
41%
59%
Building Materials Refractory Solutions
(€ millions) 2010 2009 2008 (1) 2007 (1)
Sales 922.6 875.6 1,041.4 1,025.7
Current operating income 187,5 168.0 228.3 237.9
Margin 20.3% 19.2% 21.9% 23.2%
Booked capital expenditure 14.0 27.3 52.0 53.2
(1) The financial components of net expenses for defined benefit plans for employees, are now recorded under financial income/expense from January 1st, 2009.
2007 and 2008 financial data have been restated to take into account those organizational and presentation changes.
For more information, see chapter 2, section 1.3 of the present Registration Document.
36 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Materials & Monolithics
1.7.1 BUSINESS GROUP OVERVIEW
Activities Products/Applications Markets Market Positions (1)
BUILDING
MATERIALS
CLAY ROOF TILES
& BRICKS
Roof tiles and accessories Roofing renovation & New housing French #1
for clay roof tiles, bricks and
chimney blocksStructure materials
Structure bricks
(walls and partitions)
Chimney blocks
New housing
SLATE Natural slatesHistorical monuments
Public tertiary
French #1
for natural slates
REFRACTORY
SOLUTIONS
MONOLITHIC
REFRACTORIES
(CALDERYS)
Monolithic refractories
Cast/vibrated castables
Gunning materials
Ramming mix
Dry mix
Taphole clays
Prefabricated shapes
Iron & steel
Foundry
Aluminum
Cement
Incineration
Power generation
Petrochemicals
Furnace construction & Repairs
World #1
in alumino-silicate monolithic
refractories
KILN FURNITURE Kiln furniture & components
Roof tiles
Fine ceramics
Floor tiles
Thermal applications
Kiln construction
World #1
in kiln furniture for roof tiles
(1) Imerys estimates.
1.7.2 BUILDING MATERIALS
The Building Materials activity provides the French construction
sector with clay materials (roof tiles and bricks, through a single
legal structure, Imerys TC) and slates (Ardoisières d’Angers). These
products are mainly intended for the building and renovation of
single-family housing. The activity’s customers and partners are
mainly French building material traders.
Since 2008, Imerys TC has taken part in the development and
manufacture of efficient and innovative integrated photovoltaic roof
tiles through the creation of CapteliaTM. This joint venture (1) with EDF
ENR (Energies Renouvelables Réparties, distributed renewable
energies), which aims to make electricity generation widespread on
conventional roofs, continued to grow rapidly in 2010.
❚ PRODUCTS
Raw materials
The Building Materials activity holds clay reserves in France, near
its clay product processing plants. To ensure durable operations,
the activity strives to develop its reserves, particularly through
land purchases and exchanges, and plans future site restoration
and remediation. In 2010, a new authorization was obtained near
the Wardrecques site (Pas-de-Calais, France) for the renewal of
Blaringhem quarry.
Ardoisières d’Angers operates underground slate quarries in Trélazé
(Maine et Loire, France). The slate’s exceptional purity is guaranteed
as it is mined at depths of 450 meters. The slate is impermeable,
resists harsh weather, particularly frost, and is stable and flexible,
which makes it easy to use. Slates are especially suited to steeply
sloping roofs.
For more information about clay and slate reserves, see section 1.3
of the present chapter 1 of the Registration Document.
(1) Held 50/50 by the two partners.
37IMERYS 2010 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP
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Materials & Monolithics
Applications
Clay Roof Tiles & Bricks
The Clay Roof Tiles & Bricks activity is specialized in the design,
production and sale of clay building materials for roofing (tiles and
accessories) and structure (bricks and chimney blocks).
The benefits of clay products were recently confirmed by the findings
of the Grenelle de l’Environnement (1) on housing: healthy, robust
and durable construction with the heat inertia and airtightness
qualities for low consumption buildings (B.B.C. – Bâtiments Basses
Consommation). For the same size, clay bricks provide three times
more heat insulation than concrete blocks.
In 2010, the Building Materials activity continued its innovation effort
to improve the value added for customers and offer integrated
construction solutions that improve buildings’ environmental
qualities. For more information on innovations, see section 1.8 of
the present chapter 1 of the Registration Document.
Roof tiles and accessories
The umbrella brand Imerys Terre Cuite™ covers the entire product
range, comprised of flat tiles, Roman tiles and large and small
interlocking tiles. 62 models of clay roof tiles in 69 colors that meet
local traditions and specificities are now marketed under the brand.
Seven regional labels with high customer awareness distinguish
between tile models: Gélis™, Huguenot™, Jacob™, Phalempin™,
Poudenx™, Sans™ and Ste Foy™. Imerys Terre Cuite™ has also
developed roofing accessories that help to free the roofer from
finishing work as they can be fitted without mortar or sealant.
With thermal and photovoltaic tiles, Imerys Terre Cuite™ has a
comprehensive, integrated roof offering that is healthy, visually
appealing and energy-efficient.
Structure bricks
Imerys Terre Cuite™ clay bricks (standard bricks and technical
products, i.e. Monomur and Optibric™) are used to build exterior
walls and interior linings and partitions (terracotta bricks, Carrobric™
system, Intuitys™ system). Their load-bearing or insulating function
differentiates them from facing bricks, which serve an essentially
decorative purpose.
Additionally, Imerys Terre Cuite™ develops, produces and markets
clay chimney blocks (Ceramys™) for individual heating systems.
Slate
Angers Trélazé® natural slate enjoys almost 90% unassisted
awareness with roofing professionals, through the company’s
long history and its presence on the finest buildings in France’s
architectural heritage. Historical monuments are an outstanding
showcase for the Company and their prestige reflects on all marketed
ranges. Furthermore, Ardoisières d’Angers continues to develop its
product offerings for landscapers (paving, flaked slate, curbing).
Ardoisières d’Angers has developed its sourcing internationally and
broadened its product range to address all market types. Natural
slates from Spain, Brazil and China are supplied from its new storage
platform in Saint-Nazaire (Loire-Atlantique, France).
❚ MARKETS
Market trends
The Building Materials activity is predominantly linked to the
development of the single-family housing construction and renovation
market in France.
(1) Grenelle de l’Environnement: French national meeting on October 24 and 25, 2007 attended by French government organizations and representatives of civil
society to create the conditions needed for a shift towards more environment-friendly, energy-saving practices.
Quarterly single-family housing starts in France,
annual trend (in thousands of units)
0
50
100
150
200
250
Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08
+ 2% 2010 vs. 2009
- 17% 2010 vs. 2008
Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10
Sources: French Ministery of Ecology, Sustainable Development, Transports & Housing, as at end December 2010, Imerys estimates.
38 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Materials & Monolithics
Clay roof tiles & bricks
After years of steady growth, the housing sector slumped heavily
from mid-2008. Single-family housing starts fell 15% in 2008 and
20% in 2009. Permits for single-family housing have been recovering
slowly since late 2009. This positive trend limits the downturn in
housing starts, which were affected by adverse weather conditions
and fell 3% in 2010. Renovation, which generates more than half the
Roofing activity’s sales, showed an equivalent decrease at - 2%. In
total, the clay roof tiles and bricks market was - 2% to - 3% down.
The Clay roof tiles & bricks activity outperformed the market, due in
part to the significant increase in promotion. Since the recent launch
of products meeting the specific needs of collective housing, clay
bricks have been gradually entering these new segments.
The gradual growth in construction permit applications makes a
positive trend likely in the clay roof tiles and bricks market in the
second half of 2011.
Clay bricks now have an over 30% market share. Technical clay
bricks are growing steadily because of their ease of fitting and
intrinsic qualities, which meet the low consumption buildings (B.B.C.
– Bâtiments Basses Consommation) requirements of the Grenelle de
l’Environnement, particularly thermal regulation R.T. 2012.
Slates
The market has been in a slump since 2009. Uprange segments
(public buildings, historical monuments) continue to opt for high
quality French slate, particularly for renovation work.
Main competitors
p Clay roof tiles & bricks: Wienerberger (Austria); Bouyer-Leroux,
Monier and Terreal (France);
p Slate: La Canadienne (Canada) and Cupa Pizarras, Samaca
(Spain).
❚ INDUSTRIAL FACILITIES, QUALITY AND SALES ORGANIZATION
Industrial facilities
Given the essentially local nature of its markets, the Building Materials
activity’s industrial and commercial network ensures that it has
optimum coverage of the French market. The Building Materials
activity has 20 manufacturing locations as follows:
Clay roof tiles
& bricks Roof tiles: 12 Structure bricks: 5 Chimney blocks: 2
Slate 1
In 2010, industrial assets were adjusted in line with the decrease in
the French single-family housing market with some production lines
temporarily idled.
Quality
The Quality process has been a core concern of the Building
Materials activity for several years.
As of November 2004, all Clay Roof Tiles & Bricks are certified
ISO 9001 and all manufactured products comply with the relevant
standard (NF) for their category. Certification concerns the product’s
main characteristics, particularly geometrical, size, physical
(compression resistance), thermal and hygrometric (dilation when
damp) aspects. Imerys TC was the first manufacturer to certify a
range of tiles under the “NF Montagne” (NF Mountain) standard,
which is more stringent than NF for frost resistance.
Angers-Trélazé® natural slate was the first slate to be awarded the
NF-Ardoises label by AFNOR in March 2005. Angers-Trélazé® brand
products, therefore, meet the most stringent French standard.
Sales organization
Clay roof tiles & bricks
The Clay Roof Tiles & Bricks activity is structured into sales regions
for every product range – roof tiles, bricks and chimney blocks – for
optimum responsiveness.
Every customer has a single sales contact in charge of all processes
from order through to delivery. In parallel, Imerys TC offers a set of
related services for its customers and end users and implements
a relevant communication strategy through Encyclopedias (Roof
Tile Encyclopedia, Brick Encyclopedia) and specific websites:
www.imerys-structure.com (structure), www.imerys-toiture.com
(roofing), as well as a website for solar products, www.imerys-solaire.
com, a general public website www.mamaison-terre-cuite.com and
a roofing portal www.e-toiture.com.
Trade networks are moderated to promote all product ranges
(“Négoce Expert Terre Cuite” label with almost 500 partner traders
investing in narrow-join brick laying; “Le Club Poseurs” comprising
400 brick specialists; and Réseau Imerys Solaire, a network launched
in 2009 to increase prescription of photovoltaic solutions, which now
has around a hundred members).
To develop roofing and bricklaying, professions that specialize in clay
products, Imerys TC gives out essential training in nine dedicated
centers. Almost 1,600 building professionals are trained every year in
tile fitting techniques, the use of narrow-join bricks and the installation
of photovoltaic roofing systems thanks to Quali PV Bat qualification
programs.
Furthermore, Imerys TC supports many good citizenship initiatives
through partnerships with Architectes de l’Urgence (emergency
architects) and the Sylvain Augier Foundation, which campaigns to
save natural beauty spots.
Slate
The sales organization of Ardoisières d’Angers is made up of six
geographic sectors.
39IMERYS 2010 REGISTRATION DOCUMENT
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Materials & Monolithics
In 2010, Ardoisières d’Angers continued its efforts to win the loyalty
of roofing firms within “Club de la Bleue,” which has more than
250 partners. Simpler product offering and pricing, as well as an
overhaul of the website www.ardoise-angers.com (also accessible
via the portal www.e-toiture.com), improve access to information.
Refractory Solutions consists of two activities: Calderys and Kiln
Furniture.
Calderys
Calderys manufactures and sells monolithic refractories i.e. products
used for building or repairing refractory linings and which withstand
high temperatures and severe operating conditions. The division’s
technical expertise enables it to offer complete refractory solutions
(products, engineering and supervision of product installation).
In 2009, production had to adapt to the downturn in the economic
environment, with slowed output on all sites and regrouping of
German production into Neuwied plant and closing the Hangelar
site. India was a noticeable exception, with a good activity. In 2010,
Calderys reinitiated industrial maintenance and modernization
projects that had been put on hold in 2009.
Kiln furniture
The Kiln Furniture activity develops, designs, produces and globally
markets firing supports (shaped parts designed to protect the end
product during manufacturing) and components for industrial kilns
(refractory protections for kiln car walls and structures) for ceramics
industries.
❚ PRODUCTS
Raw materials
Calderys
Calderys’ products are formulated with natural and/or synthetic
mineral raw materials, including chamottes, andalusite, mullite,
bauxite, tabular or fused alumina (alumino-silicate monolithics or “acid
monolithics”) and spinel, magnesia, dolomite (“basic monolithics”).
Refractory cements, clays and chemicals are incorporated as
binders. Monolithics can be installed through various techniques
and mainly by casting, gunning or ramming.
The value added by monolithics, such as their capacity to adapt to
any furnace shape and even complex ones, their usefulness for many
applications and their relative ease of use and ease of installation, are
driving slow but steady market share gain at the expense of shaped
refractories (bricks) in all industries.
Calderys innovation ef for ts are focused on improving the
performance, easing the usage and reducing the environmental
impacts of its products. With activity picking up in 2010, customers
requested refractory solutions that would increase the availability
of their equipment. After a successful launch in 2009, Calderys
broadened the range of “Quick Drying” (1) products in 2010.
For more information on R&D and innovation, please refer to
chapter 1, section 1.8 of the Registration Document.
Kiln furniture
Kiln furniture is comprised of refractory materials (cordierite, mullite,
silicon carbide) with the following characteristics:
p resistance to mechanical and thermal shocks, in order to protect
the end product (roof tiles, ceramic parts) from any distortions or
contact reactions and extend the furniture’s lifespan;
p light weight, to optimize available firing capacity and reduce
energy consumption during the firing process.
Applications
Calderys
Calderys’ monolithic refractories are found in every industry where
high temperatures are necessary, such as iron & steel, ferrous
and non-ferrous foundries (including aluminum), power plants,
incinerators, cement and petrochemicals.
Products deliver technical solutions to industrial customers and meet
their precise requirements. In addition to the monolithic refractories
produced by Calderys, solutions may include ready shapes,
insulating products, anchor systems and accessories. Calderys
also offers services such as design, engineering and supervision
of product installation as well as training on request for installers
and customers.
Kiln furniture
The very broad product range covers the specificities required
by industrial customers in terms of shape and use conditions,
i.e. temperature, firing cycles, loading and handling systems. The
design unit has a CAD system that simulates the furniture’s thermal
and mechanical performance, behavior and mechanical shock and
(1) These products can significantly reduce downtime by reducing heating-up time during installation by 50% or more.
1.7.3 REFRACTORY SOLUTIONS
40 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Materials & Monolithics
vibration resistance. This crucial state in the development process
enables the activity to meet the most demanding customers’ needs:
p for the roof tile industry: “H” and “U” type firing supports are
manufactured. These are placed on kiln cars to support roof
tiles during the long period in conventional tunnel or intermittent
kilns. The activity also produces and markets extremely flexible
and very lightweight superstructures and construction parts for
firing tray systems. AptaliteTM, a new range of lightweight cordierite
furniture, helps to reduce customers’ energy consumption. This
innovative furniture was first installed in 2009 on a roof tile kiln,
and new original-fit contracts were signed in 2010;
p for fine ceramics markets: pressed, cast or extruded, individual or
stackable furniture are intended for tableware and sanitaryware
firing; floor tile firing requires cast or pressed furniture.
❚ MARKETS
Market trends
Calderys
Calderys monolithic refractories products are sold all around the
world, mainly in Europe, the Middle East, Africa, and Asia.
The Monolithic Refractories market benefited from good market
conditions until the last few weeks of 2008 when demand fell as
a result of customers’ production stoppages, particularly in the
iron & steel sector. 2009 was hit by the heavy slump in crude steel
production, which decreased by 30% on average in the markets
served by the activity. The foundry segment recorded similar trends.
High temperature industries (cement, incineration, petrochemicals)
resisted better, mainly in the first half, because of the recurrent
maintenance and commissioning of furnace construction projects
launched in 2008.
The positive economic development of the global economy led to a
better business environment for Calderys in 2010. In the Iron & Steel
industry, crude steel production increased by 26% on average in the
European Union while growing between 7% to 11% in India, China,
and the CIS. The foundry segment experienced a similar positive
trend. The Thermal segment (cement, incineration, petrochemicals,
etc.) activity remains affected by the still limited number of projects
linked to the construction of new plants.
Kiln furniture
The environment for the Kiln Furniture activity, which mainly concerns
European, Asian, Middle Eastern and North African roof tiles and
fine ceramics production markets, has been highly competitive in
recent years.
p In Europe, the slowdown of the construction market, which
began in the 2nd half of 2008 and intensified in 2009, led to a
significant decrease in the renewal of kiln furniture for roof tiles
and a decrease in the sanitaryware industry.
p In emerging countries (Eastern Europe, Asia), manufacturers
suffered from the fall in exports to mature economies and the
non-recurring decrease in local demand in 2009 (partly due to
competition from Chinese imports in Southeast Asia).
In 2010, the construction market improved slightly in Southern and
Eastern Europe, leading to a moderate upturn in demand for kiln
furniture in those zones. Business remains slack in Western Europe
with very low renewal rates and inventories. However, a few new
facility or overhaul projects appeared. Southeast Asia recorded a
sharp upturn in the tableware business, leading to high sales volumes
of kiln furniture, whether to renew existing facilities or fit out new
capacities.
Main competitors
p Calderys: RHI (Austria), Vesuvius (Belgium), Tata Refractories
(India);
p Kiln furniture: Burton GmbH & Co. KG (Germany), Beijing Trend
(China), Saint-Gobain (France), HK-Ceram LTD (Hungary).
❚ INDUSTRIAL FACILITIES, QUALITY AND SALES ORGANIZATION
Industrial facilities
The Refractory Solutions activity has 20 industrial sites in 16 countries as follows:
Europe AmericasAsia-Pacific
& Africa
Calderys 10 1 6
Kiln furniture 2 1
In a market environment marked by overcapacity for kiln furniture, the Cuntis (Spain) site was closed.
To adapt to lower demand, German production of monolithic refractories was grouped together on a single site.
41IMERYS 2010 REGISTRATION DOCUMENT
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Materials & Monolithics
Quality
Calderys works to deliver the same manufactured quality everywhere
in the world. To do so, Calderys uses a benchmarking system and a
scientific database that enables it to select local raw materials that
are compliant with the required quality level. 13 Calderys facilities
and all Kiln Furniture units are certified ISO 9001.
Sales organization
In order to guarantee a market-oriented approach and offer its
customers complete refractory solutions, the activity has sales offices
or subsidiaries in all its major markets, i.e. more than 30 countries.
The Kiln Furniture activity’s products are marketed by an organization
structured in four geographic zones and strengthened by an
international network of agents and distributors.
42 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Innovation
1.8 | INNOVATION
1.8.1 RESEARCH, TECHNOLOGY & INNOVATION
As an essential partner in its customers’ performance, Imerys provides them with technical solutions that improve their manufacturing processes,
reduce their costs and raise the quality of their products. This transformation calls into play complex know-how and industrial processes that
are often exclusive and constantly optimized.
❚ A GLOBAL STRUCTURE
Seven main centers have state-of-the-art analysis and conversion facilities:
Innovation at Imerys is a decentralized process. Each of the Group’s
activities is tasked with generating new products and processes in its
business. The Innovation Department coordinates these initiatives,
disseminates best practices and gives rise to projects that combine
skills from different backgrounds.
Every year, the Group’s sustained innovation effort accounts
for approximately 1% of its sales. Its work is based on a team of
270 scientists and technicians in 24 research centers (7 main centers
and 17 regional support labs).
p Villach (Austria), a laboratory focusing on refractories and
abrasives, also very active in technical ceramics;
p Lompoc (California, USA), the benchmark laboratory for
performance and filtration minerals;
p Sandersville (Georgia, USA), more specifically focused on the
development of processes and new kaolins for paper;
p St-Quentin-Fallavier (France), where new monolithic refractories
are designed;
p Limoges (France), where the Group has taken advantage of the
creation of a European ceramics cluster to set up a research
center specialized in minerals for ceramics;
p Par Moor (UK), for kaolins and carbonates for paper and for
performance minerals;
p Bodio (Switzerland) for graphite and carbon.
In addition, seventeen regional laboratories develop customer-
specific solutions.
43IMERYS 2010 REGISTRATION DOCUMENT
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Innovation
❚ IMPLEMENTING BEST PRACTICES
Cooperation between laboratories grows every year. Transversal
projects are implemented to solve a technical problem encountered
by a given operation when other activities’ know-how can make
a contribution. Top Management, the Innovation Department or
a marketing department can also initiate these lateral projects,
which can last from a few months to a few years. For example,
after 24 months of tests, the Oil Minerals activity was launched in
2009, drawing on the Group’s broad range of raw materials to offer
products at different stages in the oil production process.
A “knowledge & skills” database gives all of the Group’s scientific
and technical personnel access to the research reports produced
over the last 20 years or so. Additionally, an annual meeting enables
all laboratory directors to share information on their profession, the
latest developments, technological progress and best practices.
To ensure that Imerys’ Research, Development & Innovation
resources are effective, the following principles are applied:
p Research & Development projects are regularly reviewed to
decide on their technical orientation and required resources. R&D
teams are building more and more connections with universities
in the form of thesis work support or by contracting out analysis
facilities or even whole sections of research projects;
p A key aspect of innovation in the Group is the close involvement
of marketing departments in the various project stages in support
of scientific and technical teams:
• At the initial stage, marketing teams help to find attractive
markets where Imerys products could be used. They also take
part in the appraisal of the benefits of a new idea for the market
and their input is used to direct ongoing research;
• Finally, their support is essential when products are launched.
This stage receives increasing attention when a research project
is completed and gives rise to sales material and technical
documentation, sales force training and relevant market
segmentation in order to broaden the array of customers likely
to adopt the proposed innovation;
p Innovation in the Group is also supported by the constant
dialogue between Marketing/R&D and Industry teams, as the
industrialization of new products plays an essential role in the
success of the Group’s research programs. For that purpose,
Imerys’ extensive pilot facilities enable it to develop prototype
products rapidly for trials with customers which are recognized
for their ability to integrate innovations into their processes.
The facilities are also used to try out laboratory processes on
a larger scale under conditions close to industrial reality. This
stage enables the Group to finalize processes before building
specialized production lines.
Moreover, the Innovation Department spots new business
opportunities for the Group. Since the Department was created,
several dozen potential avenues have been identified in this way.
❚ RESEARCH SPENDING AND PROJECT PORTFOLIO
In 2010, as over the past five years, annual spending on research
has averaged 1% of the Group’s sales.
Since 2008, innovation efforts have been enhanced by the work of
the Group Innovation team, which now accounts for approximately
18% of the research budget.
An analysis of the Group’s portfolio of research projects showed that
more than half of the amounts invested in Research & Development
correspond to identified research projects (new products, new
markets) that are monitored as such, and to technical assistance and
responses to immediate needs voiced by customers. Furthermore,
a growing proportion of research budgets is given over to applying
the Group’s processes and know-how to new markets (39% in 2010
vs. 16% for the previous year). The development of new processes
accounts for approximately 8% of the Group’s research spend.
New markets Existing markets
New processes
16%
82%
2%
39%
53%
8%
2009 2010
44 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Innovation
❚ EXAMPLES OF NEW PRODUCTS IN 2010
Thanks to its unique portfolio of minerals, its in-depth knowledge of
their properties and its industrial expertise, Imerys develops solutions
that meet its customers’ expectations in terms of production process
efficiency, as well as finished product cost and functionality.
In developing innovative solutions, the Group also strives to
reduce the environmental impact of its products throughout their
lifecycle. Innovation goals are factored into the Group’s Sustainable
Development plan. They include developing and marketing several
products with an environmental benefit every year and measuring the
carbon footprint of a growing number of products from the design
stage onwards.
A great number of new products were marketed by the Group’s
activities in their respective markets in 2010. The examples given
below offer an environmental benefit, are easier to use by customers
or based on cutting-edge technology.
Environment-friendly products
In Pigments for Paper, extensive technical work is being done to
replace paper fiber with inexpensive pigments in a range of paper
and packaging grades. The packaging market is likely to grow more
than printing and writing paper in the next few years and new pigment
grades have been developed to meet the needs of this promising
sector. LinerMAX™ is a chemically modified kaolin that can be
used as a filler (3-5% of total weight) to produce linerboard with no
loss of strength. In addition to the direct cost reduction, replacing
fiber with LinerMAX™ leads to substantial energy savings. Minerals
retain less water than fiber, so the drying process is quicker and less
energy-intensive. This packaging category has used relatively little
mineral filler to date, making it a segment with great potential. Also
in the packaging market, Opacicote™ is a blend of Brazilian kaolin
and chalk, designed to meet the needs of recycled paper-based
packaging. The blend offers good value for opacity improvement
and can replace more expensive additives such as titanium dioxide
and calcined kaolin.
In Performance Minerals, FiberLink™ 101S has enhanced the range
of calcium carbonate materials used to make nonwoven fibers for
the production of disposable wipes for cosmetics, personal care
and household products. FiberLink™ 101S enables manufacturers
to reduce substantially the amount of resin needed to produce
nonwoven fiber, as well as providing additional or enhanced
functionality to the nonwoven finished good. This new product
improves both costs and the environmental impact of the finished
product: adding 20% FiberLink™ by weight to nonwoven fiber results
in a 10- 20% reduction in the raw material’s total carbon footprint.
In wall bricks made of clay, Imerys TC continues to expand its range
to form a comprehensive offering that complies with new and future
standards in terms of energy efficiency, environmental protection and
seismic requirements. Following OptibricTM PV 4G in 2009, OptibricTM
PV S25 further improves thermal performance for added insulation
walls. The 25 cm-thick brick improves the thermal performance of
insulation-added walls and meets the demands of future European
seismic standards (eurocodes 8). It also meets 2012 thermal
regulations and Low-Consumption Building norms. With thermal
resistance of 1.61 m² K/W, equivalent to 5 cm additional insulation,
OptibricTM PV S25 fits in with steel covers and does not affect thermal
bridges in intermediate flooring.
In Minerals for Ceramics, the Ceramic Centre’s work is particularly
focused on the development of lighter, stronger products that save
raw materials and energy, and of new, more environment-friendly
mineral conversion processes. In 2010, this led to two patent
applications, one in lightweight, innovative ceramic products and
one in processing techniques.
Easier to use products
In Monolithic Refractories, the successful launch of Quick Dry No
Cement Castables (QDNCC) for the steel, foundry and aluminum
industries was borne out in 2010 by significant sales volumes.
Building on that success, Calderys launched new quick-dry
refractory concretes that resist alkalines for cement makers. Calderys
also continued to develop its paint gunning application technology
for incineration and other industries. This innovative process is
used to spray in 20-30 mm layers of product (CALDE™ GUN LF 52
AG33) that strengthens existing linings to help prevent unplanned
production stoppages.
In Filtration, significant resources continue to be invested to launch
Celite CynergyTM, a new filter aid for the beer market that combines,
in a single product, the stabilizing and filtration properties needed to
deliver the qualities demanded by the consumer: a clear, sparkling
beer with flavor intact. It allows brewers to replace some expensive
stabilizing agents, particularly silica gel-based products that impair
mechanical filtration performance, and still achieve acceptable
product taste and shelf-life profiles. By significantly reducing filter
cake volume (by 15-35%, depending on the gel type previously
used), the new product substantially extends equipment use time
between two filtration cycles, thereby increasing the filtration capacity
of existing facilities.
High-tech products
In Fused Minerals, on the strength of the market success of Alodur™
Rod 92, the new benchmark for stainless steel ingot slab molds on
furnace exit, the sintered abrasives range was widened. The grains’
microcrystalline structure improves the lifespan and performance
of molds. The launch of Alodur™ Rod 98, with alumina content over
45IMERYS 2010 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP
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Innovation
98%, meets the needs of demanding applications such as machining
low-carbon steels.
In Graphite & Carbon, C-NERGY™ Super C45 is a new, very high-
purity carbon black-based additive. It is used for its conductivity in
the production of electrodes for new generation Lithium-Ion batteries
designed for cordless tools, the automotive industry and energy
storage. The new product has the lowest specific surface of any
conductive black on today’s market. This property makes electrode
production significantly easier and improves the lifespan and safety
of Lithium-Ion batteries.
❚ PROCESSES
The Group continues to take an inventory of its industrial processes
and has set up a dedicated team, Imerys Minerals Processing Group
(IMP). Under the inventory, every plant is described according to
the same structure, regardless of country, mineral and process.
Approximately 30% of the Group’s plants have been mapped in
this way. The IMP group also aims to list equipment suppliers and
identify in-house experts. Moreover, the team has an advisory role
and helps line engineers optimize how their equipment runs. Process
performance indicators (e.g. overall equipment efficiency) have been
adapted to the Group’s businesses and are being gradually rolled out
onto production sites. In 2010, the team’s technical expertise resulted
in substantial cost savings on targeted projects, including the use
of cheaper raw materials or a significant increase in the tonnage of
products mined from our quarries and sold by the ton, thanks to the
development of relevant processes. In 2011, activities will continue
with a particular emphasis on the automation of some of the Group’s
industrial units and on energy savings.
1.8.2 INTELLECTUAL PROPERTY
Imerys’ innovation efforts are essential to its performance. Therefore,
optimizing its legal protection is fully integrated into each activity’s
product development process.
The Legal Department’s in-house experts actively campaign to
raise employee awareness of the need to keep the developments
and information resulting from research and technical assistance
teams strictly confidential. The Group’s intellectual property policy
consists of continually enhancing and extending the protection of its
essential assets. The more relevant and economically suitable means
of protection with respect to the technology in question are selected
to draw maximum competitive advantage from innovations (patent
filing, publication, secrecy, etc.).
Imerys has a broad portfolio of trademarks and current and pending
patents. Imerys holds more than 3,200 registered or pending
trademarks, more than 850 granted and pending patents and more
than 200 industrial and utility models.
To ensure effective protection of its company name, the Group has
filed the trademark “Imerys” in more than 90 countries.
The Group continues to assess and optimize the cost/benefit ratio
of its intellectual property rights portfolio. It regularly rationalizes its
portfolio of patents, industrial designs or models and trademarks
in order to ensure that value-generating technologies, designs and
trademarks are efficiently protected. Imerys also intends to defend
its intellectual property rights actively to maintain the competitive
advantages they give. The Group strives to protect industrial property
in all areas and on all continents whenever relevant.
To the best of Imerys’ knowledge, no patent, license, trademark,
design or model presents a risk likely to weigh on the group’s overall
activity and profitability. Similarly, Imerys is not aware of any dispute
with respect to intellectual property or any adverse claims that could
have a significant negative effect on its activities or financial position.
46 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Sustainable Development
The Group’s international scope gives it special responsibilities with
respect to its employees, the communities where it operates, its
shareholders and the environment. Consequently, several important
commitments to its stakeholders have been identified:
p Environment: to manage activities with respect for the
environment, which particularly entails using mineral reserves
responsibly;
p Health & Safety: to promote employees’ health and safety in
the workplace;
p Human Resources: to enable employees to develop
professionally and to provide satisfactory social benefits;
p Community Relations: to take into account the expectations of
the communities where the Group operates;
p Innovation: to develop high-quality, environment-friendly
products and technologies;
p Governance: to constantly apply and improve the Group’s
corporate governance policies.
Meeting these expectations is now a crucial condition for the
continuation of Imerys’ industrial and mining activities. Environmental
and social performance is a key component of the Group’s results.
Imerys’ Sustainable Development strategy is defined by the
Sustainable Development Steering Committee, which meets quarterly
and includes three members of Imerys’ Executive Committee. The
strategy is drawn up by a Working Group comprised of Environment,
Health & Safety, Sustainable Development and Human Resources
professionals. Representing the different operating units and
geographic zones where the Group operates, the Working Group
drafts the Group’s medium-term Sustainable Development goals. The
Environment, Health & Safety (EHS) Vice-President coordinates the
implementation of those goals. The Board of Directors is increasingly
attentive to Sustainable Development risks and issues. The Audit
Committee is tasked with the annual review of structures, policies,
objectives and results in this respect.
1.9 | SUSTAINABLE DEVELOPMENT
1.9.1 IMERYS’ SUSTAINABLE DEVELOPMENT APPROACH
❚ STRATEGY AND APPLICATION
For 2010, 87% of Sustainable Development goals were achieved. The 2011 goals should make further progress possible in all of the areas
where the Group operates. The tables below give an overview of those achievements and objectives.
2010 objectives 2010 performance
Governance ❚ Define 3-year communication strategy on policies and procedures to be known by all employees. ❚ Achieved
❚ Expand training on Code of Conduct to main managers included in the Group’s Management Database. ❚ Achieved
❚ Include non-compliance issues with the Code of Ethics and Business Conduct brought to the attention
of management in SD reported data. ❚ Achieved
Human Rights ❚ Integrate human rights compliance check into internal audits and provide a yearly report on these issues. ❚ Achieved
❚ Follow-up compliance audits at sites located in countries identified as sensitive in terms of human rights (1) . ❚ Achieved
❚ Launch self-appraisal of suppliers up to 15% of spend and conduct child labor compliance audits
of 2 relevant suppliers. ❚ Achieved
Environment ❚ Increase number of sites with an Environmental Management System. ❚ Achieved
❚ Complete biodiversity sensitivity analysis in the USA and Brazil. ❚ Achieved
❚ Initiate a user group of large quantity water users and share best practices. ❚ Achieved
(1) FTSE 4 Good A&B lists.
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2010 objectives 2010 performance
Energy ❚ Estimate mining sub-contractors’ energy consumption. ❚ Achieved
❚ Continue energy efficiency plan. ❚ Partially achieved
❚ Estimate offices’ energy consumption. ❚ Achieved
Innovation ❚ Introduce at least 2 products or processes that offer an environmental benefit. ❚ Achieved
❚ Estimate the carbon footprint of some new products. ❚ Achieved
Safety ❚ 2.7 LTA Rate (1). ❚ Achieved
❚ 10% increase in operations with a formal behavior-based safety system (SafeStart, Dupont, etc.). ❚ Achieved
Human Resources ❚ Define and start implementing a method to make sure each division develops a training program. ❚ Achieved
❚ Based on the 2008 audit, analyze benefit schemes in a number of countries (India, Turkey, Ukraine, etc.)
to identify improvement areas. ❚ Achieved
❚ Define a global diversity program. ❚ Achieved
❚ Produce accurate and relevant information on the number of employees covered by a collective bargaining
agreement. ❚ Not achieved
Communities ❚ Develop stakeholders’ relations mapping at critical operations and create action plans for the Group’s largest
industrial sites. ❚ Partially achieved
❚ Conduct at least 2 community relations events in each division. ❚ Achieved
❚ Define corporate priorities for community relations action plan. ❚ Achieved
(1) Frequency rate: (number of lost-time accidents x 1,000,000) / number of worked hours.
2011 objectives
Governance ❚ Implement the 3-year communication strategy on policies and procedures.
❚ Train all new managers on Code of Ethics and Business Conduct as part of induction.
❚ Continue to promote diversity and SD awareness among the board of Directors.
Human Rights ❚ Compliance audit at 4 Imerys sites in countries identified as sensitive in terms of human rights.
Purchasing ❚ Launch a self-appraisal of suppliers on a scope representing 20% of Group spend.
Environment ❚ Increase scope of Environmental Management Systems 10%.
❚ Complete biodiversity sensitivity analysis in Asia-Pacific.
❚ Start collecting Group mining subcontractors’ data and estimate the energy consumption of transport activities.
❚ Continue the Group’s energy efficiency plan.
Innovation ❚ Introduce at least 5 products or processes with an environmental benefit.
❚ Estimate the carbon footprint of at least 3 new products.
Safety ❚ 20% decrease in LTA Rate for employees and subcontractors.
❚ 100% of Group sites audited every month by management on the “Six Critical Protocols”.
Human Resources ❚ Implement Annual Training Plans in at least 5 Group Divisions according to the principles defined in 2010.
Ensure adequate records are maintained in this respect.
❚ Continue to analyze and implement suitable benefit programs (life insurance / AD&D / Health & Medical benefits) in 5 countries
(Tunisia, Hungary, India, Turkey, Vietnam).
❚ Involve the European Works Council in at least one SD initiative.
❚ Begin implementing the Group Diversity Program through the recruitment program.
Communities ❚ Provide operations with the appropriate tools to build their stakeholder mapping and action plans.
❚ Carry out at least 3 community relations operations in each Division.
48 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Sustainable Development
As the action plan defined in late 2008 for the 2009-2011 period is
coming to an end, a new internal consultation process will begin by
mid 2011 to define the Group’s ambitions for the next three years.
The Sustainable Development Charter and the Environment, Health
& Safety Charter, which define the Group’s commitments, will be
reexamined as part of that process.
Through ongoing dialogue, the Group remains attentive to the
observations of ranking agencies that appraise the risk of loss
of profitability in relation to Sustainable Development criteria. In
particular, it draws on their remarks to adjust its action plans. Imerys
meets socially responsible investors regularly and makes substantial
communication efforts on the Group’s website, as well as through
the overview given in its Sustainable Development Report, published
every two years.
❚ REPORTING INDICATORS AND SCOPE (1)
Since 2005, the Group’s Sustainable Development reporting has
covered all of the activities over which it exerts operating control.
Every published indicator was selected to further a key action area,
as well as its relevance to the Group’s activities. The indicators are
defined internally in consultation with the competent managers and
are consistent with the GRI (2) guidelines and the Greenhouse Gas
Protocol for reporting energy and CO2 emissions (the methodology
adopted for the definition of each indicator is given on the website
www.imerys.com / Sustainable Development section).
The processes used to accumulate the data were verified by the
Group’s Statutory Auditors (Ernst & Young Audit and Deloitte
& Associés) for 2007 data, and by the Group’s Internal Control
Department for 2008, 2009 and 2010 data. To ensure that its
environmental and social reporting complies with the new regulatory
obligations arising from “Grenelle II Environment” law from the end
of 2011, Imerys decided to have a pre-audit carried out alongside
its 2010 internal controls by Deloitte & Associés, with the aim of
identifying any potential variances between its current processes
and the demands of Grenelle II.
Imerys publishes its Sustainable Development Report every two
years. The 2009 edition can be found on the Group’s website (www.
imerys.com) in the Sustainable Development section. This section
provides additional, regularly updated information on the Group’s
Sustainable Development strategy, actions plans and achievements.
It was overhauled in spring 2010 to give easier access to more
complete information.
❚ ETHICS & HUMAN RIGHTS
Since 2007, Imerys has had a Code of Conduct that sets out the
ethical and business conduct principles that the Group expects
all of its employees to observe. The document is available in ten
languages and can be consulted by all Imerys employees on Imerys’
website and intranet. Actions to raise the awareness of the Code
continued in 2010, including specific online training for the main
managers identified in the Group’s management database. Since
this interactive training has been implemented, 1,900 employees
(including the Group’s top 350 managers) worldwide have been
trained on compliance with the Code. All newly recruited managers
will receive the training as part of their induction program from 2011.
In addition, in late 2010, the Group set up a simplified reporting
process that enables Group division managers to report any
breaches of the Code particularly in terms of fraud, corruption or a
violation of human rights for that year.
The growth of Imerys’ activities in developing countries can change
the risk level in terms of Environment, Health & Safety and human
rights issues. To ensure that recently-acquired companies in these
countries are rapidly aligned with the standards applied in these
essential areas, orientation seminars are organized systematically
within the first year following an acquisition. These seminars are
also used to identify areas that need improvement and define any
action plans required.
Since 2009, the focus has been on the issue of child labor.
Operations managers from every Imerys site in areas where vigilance
is recommended by FTSE4Good received training on child labor
regulations. In parallel, these sites’ largest suppliers were asked to
certify that they complied with the International Labor Organization
convention on child labor. Finally, teams of internal auditors now check
that the protocol is followed when conducting audit assignments in
those countries. In 2010, 19 Imerys sites were audited in this way,
with no cases of non-compliance detected.
More generally, the Group intends to involve its suppliers in its
Sustainable Development process, particularly through its internal
qualification system. The system was set up in 2008 and is designed
to keep supply risks to a minimum and to qualify suppliers. Supplier
self-appraisal was carried out in 2010 on a scope representing 15% of
the Group’s purchases. Six test audits, including a child labor section,
were conducted in India and China to check the approach. No cases
of non-compliance were observed. In 2011, the scope of the supplier
qualification system will be extended to cover 20% of spend.
(1) The 2007, 2008 and 2009 data regarding the environment, health & safety presented in this section are different from those published in the 2009 Annual Report.
The main sources of difference are allowance for changes in Group structure, and the correction of some reporting errors.
(2) The global report initiative (GRI) is intended to encourage an environment in which “reporting on economic, environmental, and social performance by all
organizations becomes as routine and comparable as financial reporting.
49IMERYS 2010 REGISTRATION DOCUMENT
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❚ ENVIRONMENTAL MANAGEMENT SYSTEMS
The Group aims for all activities to have an Environmental Management
System (EMS) that enables them to address environmental risks
and issues. The Group has therefore made EMS the subject of a
specific environmental protocol (E8) that is an integral part of the
EHS audit program. If any of the 8 pillars of an effective EMS (1) are
identified as lacking during an EHS audit, this becomes an audit
finding requiring site management to take corrective action. In early
2010, a global self-appraisal procedure was initiated centered on
the eight pillars. The self-appraisal is presented to management
at each quarterly review. EMS are further supported by personnel
awareness and training actions. Practical tools are available to sites
via the EHS intranet and specific training modules (environmental
aspects & impacts, auditing) were delivered throughout the year
through webinars. Finally, a training seminar focusing on auditing
Environmental Management Systems brought together the Group’s
EHS network in each of its main geographic zones (Asia, Europe,
North America and Latin America). More generally, ISO 14001 or
EMAS certification is encouraged and considered an outstanding
achievement at Imerys, but is not demanded.
(1) Eight pillars of an effective EMS: existence of a policy; identification of aspects & impacts; identification of legal requirements; setting goals and targets; appointment
of specific representative; training given out; emergency procedures, and audit.
The table below sets out the number of Imerys sites with an Environmental Management System (EMS). In 2010, 160 sites had an EMS, a 50%
increase from 2009. This effort will be kept up in 2011.
(number of sites) 2010 2009 2008 2007
ISO 14001 or EMAS certified (*) 70 59 61 54
Sites with the 8 pillars of an effective EMS 90 48 42 37
Total 160 107 103 91
(*) EMAS: Eco Management and Audit Scheme (European standard).
❚ WATER CONSUMPTION
The table below presents trends in water consumption for the past four years:
(millions of liters) 2010 2009 2008 2007
Total water consumption of which: 53,303 49,693 63,237 76,991
Water obtained from water suppliers 14.4% 12.5% 13.9% 11.9%
Water drawn from groundwater 43.0% 57.9% 47.3% 51.8%
Water drawn from surface water 27.1% 22.4% 22.5% 23.4%
Water obtained from other surfaces 15.6% 7.2% 16.3% 12.9%
After an inventory was drawn up in 2009 of the Group plants that consume most water, a webinar was organized to foster the sharing of best
practices.
In addition, the Group began in mid-2010 to gather data on the amounts of water recycled by its sites. These data will be communicated when
the collection process has become general practice.
Imerys pumps underground water to keep its quarries in good
condition and uses water to transform its minerals. The water is
then stored in retention basins for reuse or released into streams
and rivers after treatment and purification. In some cases water is
delivered in products such as slurries.
Imerys tracks its water consumption (excluding underground water
pumped to keep quarries in good condition) and improves the
accuracy of collected data every year.
50 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Sustainable Development
❚ WASTE
Imerys collects data on waste generation and recycling. The table below sets out the trends for the past four years:
(metric tons) 2010 2009 2008 2007
Total waste (*), of which: 312,294 282,879 377,778 339,845
Hazardous industrial waste 0.7% 0.4% 0.4% 0.6%
Recycled hazardous industrial waste 0.3% 0.1% 0.1% 1.0%
Non-hazardous industrial waste 37.7% 33.7% 35.8% 44.0%
Recycled non-hazardous industrial waste 61.3% 65.8% 63.7% 54.3%
(*) 2007, 2008 and 2009 data were restated to exclude tonnages of unused minerals that were previously recorded incorrectly as waste by one site.
❚ ENERGY CONSUMPTION AND AIR EMISSIONS
The use of fuel in product transformation operations (heating,
drying, firing, melting, sintering and calcining) is the primary
source of greenhouse gas emissions in the Group (50% of the
total). Indirect emissions relating to the generation of the electricity
used in production form the second largest source (40% of total).
Finally, some of the transformation processes themselves cause
CO² emissions themselves (10% of total), particularly through the
decarbonation of raw materials.
21 Imerys industrial sites take part in the greenhouse gas quota
trading scheme set up in the European Union. For the third year of
Phase 2 of the trading system (2008-2012), emissions from those
industrial sites, although higher than in 2009, remained below their
assigned quotas.
After improving energy efficiency for the 2006-2008 period by 6.3%,
the Group recorded a deterioration in its performance in 2009
(- 2.6%).
The energy productivity appraisal procedure was overhauled in late
2010 to improve its accuracy. The figures published for 2010 were
calculated under the new procedure, which takes produced tons
into account and is more accurate than the sales and inventory data
previously used (1). The upturn in activity in 2010, without reaching
2008 levels, enabled the Group to improve energy efficiency by 2.3%
compared with 2009.
In parallel, specific CO2 emissions from fossil fuels decreased 2.5%
compared with 2009, reflecting a slight improvement in the energy
mix. The relative share of biomass was stable at 4% of total energy
consumption.
The Group’s new energy intranet, set up in late 2009, fostered
the sharing of information and best practices across the Group.
Furthermore, to develop knowledge of the impacts of the Group’s
activities in terms of greenhouse gas emissions and begin
examining scope 3 of the GHG Protocol, an initial estimate of energy
consumption by offices and by mining contractors was made in
late 2010. This will be taken further in 2011 with an assessment of
consumption relating to the transport of goods. Finally, to improve
monitoring of the Group’s progress on energy and carbon efficiency,
it was decided to track data on energy and CO2 on a monthly basis,
rather than quarterly, as of January 1, 2011.
(1) See detailed methodology on www.imerys.com/Sustainable Development.
The Group’s activities produce relatively small quantities of industrial
waste, as transformation processes are mainly mechanical (e.g.
grinding) and physical (e.g. density separation) The Group’s
processes separate minerals with value for customers from minerals
with no market value. The latter are usually stored on or nearby the
Group’s sites. As a result of technological progress or new market
opportunities, these minerals may be used in the future. In many
cases, these minerals are used as fill material for the restoration of
sites at the end of their operational lives. Consequently, they are not
recorded as waste.
Energy consumption
Total energy consumption(*) by the Group over four years
(thousands of Gj) 2010 2009 2008 2007
Total 36,563 28,265 40,511 43,223
(*) Net of resold electricity.
51IMERYS 2010 REGISTRATION DOCUMENT
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Breakdown by energy source
(%) 2010
Electricity 33%
Natural gas 38%
Other fossil fuels 25%
Biomass 4%
Total 100%
CO2 Emissions
Total CO2 emissions related to energy consumption, including biomass and production processes (1)
(thousands of metric tons) 2010 2009 2008 2007
Total (actual data) 3,020 2,368 3,406 3,594
Total (data at constant Group structure) 3,087 2,486 3,533 3,765
Breakdown by emission source (actual data)
(%) 2010
Energy(*) 89%
Process 7%
Biomass 4%
Total 100%
(*) Excluding biomass.
❚ SOX AND NO
X EMISSIONS
The combustion stages of the conversion processes generate emissions of oxides of sulfur (SOx) and nitrogen (NO
x). Imerys publishes below an
estimate of its SOx and NO
x emissions, applying specific conversion factors to each source of consumed fuel. Manufacturing process-related
SOx emissions are not yet factored into the Group’s reporting.
(metric tons) 2010 2009 2008 2007
Sulfur dioxide (SOX) 3,933 3,214 4,703 4,977
Oxides of nitrogen (NOx) 6,136 4,942 6,678 7,192
(1) With respect to energy consumption and CO2 emission reporting:
• Only the Group’s production sites come under the perimeter. Commercial activities, sales offices and administrative offices, to which most of the selected
indicators would not be relevant, were excluded from the scope of application. This exclusion has a minor impact on energy consumption and CO2 emissions.
• On a few sites, Imerys subcontracts some activities, chiefly transportation and mining. When data on fuel are available, particularly when Imerys buys that fuel,
this has been taken into account. On the other hand, in the event that fuel is bought by contractors, the corresponding data have not been taken into account as
they could not be recorded with the required accuracy. Only data concerning companies over which Imerys has operating control have been taken into account.
• GHG Protocol methodology was applied to 2007, 2008 and 2009 emissions for the sake of comparison with the 2010 perimeter. For the United States, electricity
emission factors are those of the e-grid.
52 2010 REGISTRATION DOCUMENT IMERYS
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Mining only entails temporary occupation of ground. To manage the
environmental consequences of mining, every Group entity draws
up a restoration plan. The plan describes the remediation methods
applied during the site’s operation and at the time of its closure.
This is the context for the ambitious Eco-Community project that
Imerys Minerals Ltd is carrying out in Cornwall (United Kingdom). The
plan is to create an eco-community on the 700 ha of Imerys-owned
industrial land that is no longer required for operational purposes.
The Eco-town status of the project was granted by the British
Government in July 2009, being one of only four projects selected.
In May 2010, Imerys entered into a partnership with Orascom, an
international property development group, covering the rehabilitation
of the land, the preparation of planning applications, and the
construction of the Eco-Community. The joint venture, in which the
Orascom group holds 75%, has been newly named Eco-Bos, after
the Cornish Word “Bos”, meaning “Home”. The first pilot project will
be implemented on the site of the former kaolin quarry at Baal, near
St Austell (Cornwall, UK).
The project will take place in successive stages over more than 10
years. It provides that once planning permission is granted on each
site, Eco-Bos Development Limited will purchase the corresponding
land and assume rehabilitation costs.
Imerys strives to reduce negative impact on biodiversity by keeping
affected surfaces to a minimum, continuously restoring them
whenever possible and taking offset measures. The biodiversity
sensitivity study conducted in 2009 on all European sites was
extended to Brazil and the United States in 2010. In total,
approximately 18% of the Group’s sites located in these regions are
close to zones that are considered of interest in terms of biodiversity.
In 2011, the assessment will be extended to Asia-Pacific. In addition,
Imerys takes an active part in the work done by mining industry trade
federations to share best practices on biodiversity management and
define common indicators.
1.9.2 SAFETY
Mining and mineral processing require a strong safety culture in
order to prevent accidents. Since 2005, a series of strategic safety
initiatives has been implemented to support the efforts made by
Imerys’ units and provide them with the tools and training needed to
improve workplace safety continuously and sustainably. The Group’s
approach is structured around the following orientations: clearly
defined audit protocols and regular audits, a global training plan,
a safety program based on a behavior-based model, an accident
analysis program, a fatality prevention plan and events designed to
bolster safety culture at key facilities.
In 2010, Imerys reported three work-related fatalities: an employee,
a temporary worker and the employee of a subcontractor. Three
employees also lost their lives in a car accident while returning from
a training session.
These work-related fatalities made it necessary to reexamine Imerys’
safety programs, especially with respect to preventing serious
accidents. The “Serious Six Protocols” that address the highest risks
of serious injury or fatality in mining will be revitalized by an energetic
action plan that will be implemented throughout 2011:
p Online training on the Serious Six Protocols has been set up and
must be followed by all of the Group’s operations managers by
the end of the first quarter of 2011;
p As from the second quarter of 2011, operations managers on
every site must conduct a monthly self-audit of the Serious Six
Protocols. The results of this work will be presented to Executive
Management quarterly as part of its business review.
The reduction of workplace accidents and serious accidents in the
Group also involves the analysis of accident causes and focus on
everyday behavior:
p “Safety Alerts” are issued whenever a serious accident occurs.
They set out the causes, corrective actions and the lessons
learned. Visual materials (videos re-enactments and posters) have
now been added to make understanding and analysis easier.
These items have been circulated throughout the Group and
published on the EHS intranet;
p The Group fosters a safety culture based on safe behavior through
behavior-based safety programs. In 2010, approximately one
hundred sites had launched these programs (a 10% increase from
2009). To accelerate progress, an in-house program for behavior-
based safety has been created by the Group and EHS managers
have been trained. In 2011, the goal is to raise the number of sites
with a behavior-based safety program by a further 10%.
❚ SITE RESTORATION
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In total, since the Group’s safety programs were launched, its lost-time accident rate has been cut by 82%. The table below sets out the
frequency and severity rates for accidents in the group over the past three years.
2010 2009 2008 2007
Lost-time accident rate (*)
Imerys employees 2.16 2.86 4.68 5.67
Other employees (**) 3.36 3.96 4.22 8.10
Severity rate (***)
Imerys employees 0.10 0.20 0.20 0.18
Other employees (**) 0.07 0.04 0.11 0.14
(*) Frequency rate: (number of lost-time accidents x 1,000,000)/number of work hours.
(**) Non-Imerys employees such as contractors or agency workers, who may be retained by the company to perform work or provide services.
(***) Severity rate: (number of lost days x 1,000) /number of work hours.
One highlight of 2010 was a further improvement in the lost-time
accident rate, which worked out at 2.16 as of December 31, 2010.
A new protocol designed to improve management of Group
contractors’ safety was also defined, and monthly safety performance
is now monitored using a combined employee/contractor indicator.
Furthermore, it was decided to step up workplace accident
monitoring through monthly reporting of information on non lost-
time accidents. These data will be consolidated for the entire Group
as from January 1, 2011.
❚ HEALTH
Imerys implements measures to improve the working environment
for its employees. The Group’s industrial hygiene program continues,
with an emphasis on checking compliance with applicable local
regulations. Many Group employees are exposed to mineral dust and
chemicals. Consequently, the Group has set up a protocol to identify,
assess, and control or eliminate potential sources of exposure to
dangerous substances in the work environment. More specifically,
as new regulatory requirements on the control of chemical risks
in the workplace came into force in France, the Group signed
master service agreements with certified consulting organizations.
The agreements are intended to help Imerys subsidiaries to fulfill
the conditions for carrying out technical controls and to centralize
exposure data. Following the examination of those data, targeted
prevention policies will be defined. Furthermore, under this program,
the results of specific measurements for crystalline silica alveolar
particles will enhance the European database on employment/
exposure created on the initiative of the European Industrial Minerals
Association (IMA-Europe), in which other European companies in
the Group participate.
All of the Group’s European sites taking part in the European
agreement on “workers’ health protection through the good
handling and use of crystalline silica” reported their application and
improvement status with respect to the second reporting process
organized by the NEPSI (1) group in 2010, the findings of which were
published in June. This great mobilization in a harsh economic
context reflects the importance that the Group attaches to this issue.
The prevention of exposure to noise and vibrations is also one of the
Group’s priorities on workplace health. Actions to raise occupational
health awareness continued in 2010 with the creation and addition
of a specific module in the EHS Universities program. Messages
were widely circulated internally, particularly in autumn 2010 with
the organization of a webinar on workplace health, in which almost
100 line and EHS managers took part.
❚ REACh
The Group has carefully analyzed the impacts of the European
Community regulation on chemicals, REACh (2). Under REACh,
“Minerals which occur in nature” are exempt from registration,
which significantly reduces the impact of this new regulation on
Imerys. However, a small number of the Group’s products remain
subject to registration, and the procedures needed to comply with
the regulations have been undertaken. Furthermore, the Group
carefully monitors and is preparing for the implementation of the
Globally Harmonized System (GHS), which is intended to harmonize
international hazard classification and notification systems.
(1) European Network on Silica.
(2) Registration, Evaluation, Authorisation and Restriction of Chemicals.
54 2010 REGISTRATION DOCUMENT IMERYS
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1.9.3 REGULATORY COMPLIANCE, AUDITING
The table below gives an overview for the past four years:
Number of prosecutions Fines in euros
2010 2009 2008 2007 (*) 2010 2009 2008 2007 (*)
Total 10 32 15 16 28,872 21,248 45,496 64,483
(*) Does not include Brazilian government action in response to June 2007 release of kaolin from Imerys Rio Capim Caulim.
1.9.4 COMMUNITY RELATIONS
In every country where it operates, Imerys is subject to various
environmental, health and safety regulations. To strive for compliance
and the correct application of the Group’s protocols, its operations
are audited regularly.
The auditing team is comprised of EHS specialists who are chosen
from operating activities and are regularly trained and managed by
the central EHS team. It was bolstered in 2010 and now numbers
around 20 people, up from 13 in 2009. Peer review of audit work,
consensus meetings and action plan monitoring ensure that the
annual program is consistent and of high quality.
The EHS audit plan is defined according to a risk matrix factoring
in criteria such as unit size, existence of solid material storage
structures, occurrence of environmental incidents or lost-time
accident rate. After the reduction of the audit program in 2009,
partly due in part to the economic climate, the usual pace resumed
in 2010 with 36 assignments carried out during the year, compared
with 31 in 2009.
In 2010, auditing work was stepped up in two main areas:
p Environmental Management System (EMS), with specific training
to support the rollout of Imerys’ EMS program (see above);
p Monitoring the stability of solid mineral storage facilities (dams,
impounds, etc.), including the formalization of an audit checklist
for this subject.
Finally, Imerys closely monitors the cases brought against it on
environmental and safety grounds and the amount of fines it has
had to pay.
Taking into consideration the expectations of communities around
the Group’s industrial and mining sites is a crucial factor for the long-
term sustainability of Imerys’ activities. Worldwide, Imerys seeks to
increase the positive effects of its activities and reduce any negative
aspects.
The communities in which the Group operates are extremely diverse.
Consequently, the Group’s decentralized management method is
appropriate for dealing with community relations. This flexibility
enables every operation to adapt to the values, local constraints and
possibilities of the host community. Under a “Community Relations”
protocol, Imerys formally delegates responsibility for community
relations to the most senior employee with responsibility for day-
to-day oversight of each facility. Under the community relations
protocol, he or she is required to draw up a stakeholder mapping and
create a plan for continuous improvement of stakeholder relations.
In that context, many projects are developed every year by the
Group’s units in a wide range of areas. The main orientations are
as follows:
p Engage with neighboring communities: Imerys engages in
open days, school visits, regular meetings with local authorities
and encourages operation/community liaison structures to foster
knowledge of the Group’s activities and the issues entailed.
Almost 70 initiatives were organized for this purpose by the
Group’s operations in 2010;
p Contribute to local economic development: Imerys is active in
many emerging countries, where the creation of a local economic
fabric form part of the plans for mine closures;
p Educate and train: Imerys aim is to raise standards of education
in the communities where it operates, particularly in basic life skills
and digital know-how;
p Take part in relief actions: whether for flooding in China,
hurricanes in the United States or an earthquake in Argentina,
Imerys units rally round neighboring communities struck by
natural disasters. Contributions are also made to international
causes with the Group’s support.
This vitality is reflected every year in the quality and number of
projects relating to community relations entered for the Sustainable
Development in-house challenge (47% of the 66 entries in 2010).
55IMERYS 2010 REGISTRATION DOCUMENT
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Sustainable Development
1.9.5 HUMAN RESOURCES
The Human Resources (HR) department’s mission is to enable the
Group to have the people needed for its development, and to ensure
that its organization grows in an effective, coordinated manner.
Keeping this in mind, it develops and implements general principles
and processes in step with the Group’s decentralized management
philosophy and in compliance with the relevant national legislation.
To improve its processes, work began at the end of 2010 on updating
the HR policies and procedures for the Group.
Human Resources professionals are responsible in their business for
the entire function, reporting to the business’ line manager. To ensure
processes are consistent and common principles are applied, they
also report on a functional basis to the Group Human Resources
Department. In addition, the function is coordinated in the major
geographic zones, in which the Group operates.
❚ HUMAN RESOURCES PRINCIPLES & MAIN AREAS OF ACTION
The Group has defined its Human Resources policies centered on
the following principles:
p Meet its employees’ expectations, particularly as regards working
conditions and safety, benefits and personal development;
p Provide managers with management principles that comply with
the Group’s spirit and ethics, especially in terms of diversity,
behavior, standards, discourse and respect for other people;
p Foster the harmonious integration of its activities through active
involvement with local communities.
The Group is committed to complying with legislation in force in
the countries where it operates, particularly in terms of health and
safety, non-discrimination, privacy, child labor, compensation and
working hours.
The processes behind those principles apply to a number of key
areas including the following:
p Recruitment: attract the most suitable candidates, both to
support organic growth and to deploy new activities. Hiring
resumed cautiously in 2010. The Group brought in some targeted
new recruits and continued its initiative to take on more interns
from leading schools and universities;
p Mobility: fill vacancies with existing skills within the Group. For
that purpose, Imerys has set up common tools and processes for
all activities and functions, including annual performance reviews
(PAD) and succession plans for its principal managers (OPR). This
internal mobility goal is a priority for Human Resources teams and
specialized committees meet regularly on the issue. Manager
vacancies in the Group are also published on the Imerys intranet;
p Training: enable every employee to develop his or her talents and
foster the sharing of best practices. In parallel to the initiatives
taken by operating activities, the Human Resources Department
proposes specific Imerys training programs in areas judged
essential for the Group (e.g. finance, geology, marketing, project
management, sales). It also carries out more targeted actions for
senior managers and to reinforce professional expertise in fields
such as marketing;
p Compensation and benefits: roll out coordinated, competitive
systems that take into account both the results of the business
for whom employees work and their individual performance. In
that respect, annual salary reviews are closely coordinated by the
Human Resources Department. While local competitiveness is
favored, some of the systems set up are designed as the basis for
a consistent, uniform approach to performance within the Group,
especially for executives and senior managers (bonus system
with identical choice and weighting of financial criteria across
all activities). Furthermore, the Group ensures that competitive
benefits and insurance programs are implemented in the zones
where it operates;
p Industrial relations: the Group aims to build constructive relations
with its employees and their representatives in accordance with
local regulations.
The Imerys European Works Council (EWC) was created in 2001.
Its perimeter covers employees in 20 countries: Austria, Belgium,
Czech Republic, Denmark, Finland, France, Germany, Greece,
Hungary, Italy, Luxemburg, Netherlands, Poland, Portugal,
Romania, Slovenia, Spain, Sweden, Switzerland, and United
Kingdom. Its employee delegation of 15 members holds an annual
plenary session. The EWC’s five officers meet at least twice a
year. A new agreement on the EWC’s mode of operating was
ratified by its representatives in April 2010.
The need to improve the efficiency and productivity of the
Group’s activities may lead to internal restructuring plans and
job cuts. In such situations, the Group’s policy is for operations
to give priority to finding in-house placement solutions for the
employees concerned and to set up retraining programs and
support measures in order to provide the help needed to look
for a job or achieve a personal project.
p Internal communications: The aim is to provide all employees
with information that can help them understand the Group’s
environment and activities:
• induction sessions are regularly organized for managers,
• appointment or organizational announcements up to a certain
level in the chain of command are made by the Internal
Communications department through the Group intranet,
56 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Sustainable Development
• The company newspaper “Imerys News” is mainly designed to
develop a feeling of belonging, share experiences and provide
information. Special issues may be produced in line with major
events such as the Sustainable Development Challenge,
• The Group also publishes brochures on specific topics such as
the “Code of Business Conduct and Ethics”, “Crisis Management
& Communication” or “Advice for Frequent Travelers”;
p Human Resources Reporting: monthly reporting covering the
entire scope of the Group includes highly detailed indicators
(translated into five languages) concerning workforce by country,
contract type and activity, professional training, disability, age
and seniority.
A Group organizational chart is regularly published. It shows the
main reporting and functional relations within Imerys and includes
approximately 700 positions with the names of their incumbents. The
chart is deliberately restricted to in-house circulation.
In 2008, the Human Resources Department set up a management
database in accordance with current regulations on the exchange
and protection of personal data. At the end of 2010, it includes more
than 1,500 executives and senior managers. This tool gives fast
access to employees’ career paths and the components of their
compensation and clearly boosts internal mobility. In the first weeks
of 2011, it will also be tested on a limited scope of activities as a
salary review tool.
❚ HUMAN RESOURCES KEY PERFORMANCE INDICATORS
Employee headcount
12/31/2010 12/31/2009
Total Group as of 12/31 15,090 14,592
Average annual headcount 15,093 15,368
p As of December 31, 2010, the Group has 15,090 employees,
including 664 on fixed-term contracts, i.e. 4.4% of the total
headcount. As on December 31, 2009, the headcount was
14,592, of which 512 fixed-term contracts (i.e. 3.5%).
p To estimate the Group’s total workforce, agency workers and
on-site “trade” contractors should be added (3,100 people as
of December 31, 2010). The countries that use this external
workforce the most are India (890), Brazil (540), the United
States (498), France (320), South Africa (235) and Vietnam (105).
In addition, there were 109 interns as of December 31, 2010
(88 as of December 31, 2009). Imerys’ total headcount (including
agency workers, on-site contractors and interns) therefore works
out at 18,299 as of December 31, 2010, compared with 17,067
as of December 31, 2009.
In 2010, the headcount grew steadily during the first eight months
(15,483 employees as of August 31) before leveling out towards
the end of the year, mainly because of seasonal cycles. There
organization plans undertaken in 2009, in some cases, finished
having an effect in mid-2010 (IKF in Spain, Imerys TC in France).
The Group’s average headcount for 2010 was 15,093 employees,
compared with 15,368 in 2009 (of which 800 and 649 on fixed-term
contracts, respectively).
Employees by business group
12/31/2010 12/31/2009
Minerals for Ceramics, Refractories, Abrasives & Foundry 5,664 5,330
Performance & Filtration Minerals 2,769 2,865
Pigments for Paper 2,364 2,108
Materials & Monolithics 4,028 4,048
Holding company 265 241
Total 15,090 14,592
The distribution of employees by business group was relatively stable from 2009 to 2010, with Minerals for Ceramics, Refractories, Abrasives
& Foundry, still the business group that employs the most people (37.5% of the Group’s headcount).
57IMERYS 2010 REGISTRATION DOCUMENT
PRESENTATION OF THE GROUP
1
Sustainable Development
Employees by geographic zone
12/31/2010 12/31/2009
Western Europe 6,064 6,207
of which France 2,974 3,078
of which United Kingdom 1,246 1,215
Central Europe 1,229 1,119
North America (inc. Mexico) 2,431 2,387
of which United States 2,048 2,014
South America 1,484 1,237
of which Brazil 1,042 806
Asia-Pacific 3,137 2,934
of which China 1,764 1,592
of which India 641 636
Africa 745 708
Total 15,090 14,592
The geographic distribution of employees was also stable from 2009
to 2010, with 48% of employees located in Europe (40% in Western
Europe), 21% in Asia-Pacific, 16% in North America and 10% in
South America.
The decrease recorded in Western Europe mainly concerns the plans
initiated in 2009 (France & Spain). The other geographic zones all
posted a slight increase in headcount, as did China. The significant
rise in Brazil mainly stems from the acquisition of PPSA in August
2010.
Employees by function
12/31/2010 12/31/2009
Operations – Production – Manufacturing 10,466 69.4% 10,198 69.9%
Logistics - Purchasing 710 4.7% 654 4.5%
Research & Development – Geology 513 3.4% 458 3.1%
Sales & Marketing 1,183 7.8% 1,152 7.9%
Support & Administration 2,218 14.7% 2,130 14.6%
Total 15,090 100.0% 14,592 100.0%
The distribution of employees by function in the Group is unchanged.
Turnover
Turnover as indicated below is analyzed as the number of voluntary
departures in the year, compared with the previous year (as of
01/01/2010), for open-ended contracts only.
In 2010, the rate was 5.4% for the Group as a whole (4.6% in 2009).
Because of the impact of the economic crisis on jobs, the rate
was low in 2009 for all regions and all business groups. In 2010,
it remained relatively low except in Asia-Pacific where it was close
to 10%, reflecting the upturn in business in the region, particularly
in China where a significant number of resignations were recorded
(173 out of the 534 resignations in 2010).
For all causes of departure, excluding the end of fixed-term contracts,
1,429 people left the Group in 2010 (of which 37% resignations
and 29% economic redundancies), compared with 3,235 in 2009
(of which 62% economic redundancies and 13% resignations).
Recruitment and internal mobility
Recruitment efforts in 2010 concerned 2,701 people (1,581 in
2009), of whom 1,267 were recruited on open-ended contracts and
1,434 on fixed-term contracts. The countries that recruited the most
people on open-ended contracts were China (279) and the United
States (218). In addition, Sweden and South Africa tended to recruit
employees on fixed-term contracts (318 and 225, respectively). The
business groups that made the biggest contributions to recruitment
are Minerals for Ceramics, Refractories, Abrasives & Foundry with
1,264 people hired (of which 574 on open-ended contracts) and
Materials & Monolithics with 866 (243 open-ended contracts).
At the same time, more than 250 internal moves filled vacancies in
the Group, of which 150 in Western Europe and around 60 in line
and support management positions.
58 2010 REGISTRATION DOCUMENT IMERYS
PRESENTATION OF THE GROUP1Sustainable Development
Diversity
Percentage of women by geographic zone
12/31/2010 12/31/2009
All employees Salaried employees All employees Salaried employees
Western Europe 15.4% 29.0% 15.5% 29.5%
Central Europe 19.4% 35.8% 19.3% 36.0%
North America 13.7% 33.4% 14.2% 33.8%
South America 11.3% 31.8% 11.0% 31.4%
Asia-Pacific 16.4% 28.2% 15.4% 26.5%
Africa 11.3% 13.3% 8.3% 10.3%
Total 15.0% 29.9% 14.8% 29.8%
The proportion of women in the Group’s total workforce increased
slightly from 2009, particularly in Africa and Asia-Pacific. In addition,
the proportion of women senior managers (members of support or
operations management teams) rose to 11.3% in 2010, compared
with 9.2% in 2009. The nature of the Group’s industrial activities
means that this proportion remains marginal in the “workers”
category.
Number of disabled employees
According to the definition used in the Group (1), Imerys employs
196 people who have declared themselves as disabled with their
Human Resources department (209 in 2009).
Age and seniority
While 61% of the Group’s employees are in the “over 40” age group,
there is wide geographic disparity. In regions where the Group is
developing or only established bases recently (South America,
Asia-Pacific and Africa), Imerys mostly employs people aged
30-40 (33%-37% of employees). The disparity is best shown in the
following example: 65% of employees are under 40 in South America,
compared with only 27% in North America.
Overall distribution of seniority is balanced (30% of employees have
4-10 years’ seniority, 27% more than 20 years). Nevertheless, there
are again significant differences by geography. In South America,
46% of employees have less than three years’ service. Seniority is
also low in Asia-Pacific and in Africa, where almost 70% of employees
have less than 10 years’ service. On the other hand, in North America
and Europe, more than one-third of the workforce has more than 20
years’ service and 60% more than 10 years.
Industrial relations
In 2010, 9,432 working hours were lost due to strikes, of which 6,113
in France and 2,430 in the United States (4,872 in 2009, 5,019 in
2008 and 12,065 in 2007).
In 2010, 151 agreements were signed with the various employee
representative bodies or unions in Group companies (147 in 2009).
Training
More than 215,000 training hours (corresponding to a precise
program and content) were given out in 2010, compared with 197,000
in 2009. Awareness training on health & safety procedures and
measures accounts for 51% of all training hours, technical expertise
development training 40% and managerial training 9%.
More than 9,400 employees were trained at least once in 2010, i.e.
62% of the Group’s annual average workforce. This rate shows the
importance attached to training incumbent teams.
Employee shareholding
The Group did not carry out a new employee shareholding plan in
2010.
As of December 31, 2010, the number of employee shareholders was
2,727, i.e. 18% of the Group’s workforce, in 26 countries. In 2009,
there were 2,924 employee shareholders, i.e. 20% of the workforce.
(1) Application of national legislation or, as the case may be, reference to the International Labour Organization definition.
22.1 BOARD OF DIRECTORS’ MANAGEMENT REPORT 60
2.1.1 Financial year 2010 60
2.1.2 Detailed commentary on the Group’s results 61
2.1.3 Commentary by business group 63
2.1.4 2011 Outlook 65
2.1.5 The Company’s business and results in 2010 66
2.2 AUDITORS’ REPORTS 702.2.1 Statutory Auditors’ Report on the consolidated fi nancial statements 70
2.2.2 Statutory Auditors’ Report on the fi nancial statements 72
2.2.3 Statutory Auditors’ Special Report on regulated agreements and commitments with third parties 73
REPORTS ON THE FISCAL YEAR 2010
60 2010 REGISTRATION DOCUMENT IMERYS
REPORTS ON THE FISCAL YEAR 2010 2Board of Directors’ Management Report
2.1 | BOARD OF DIRECTORS’ MANAGEMENT REPORT
2.1.1 FINANCIAL YEAR 2010
In 2010, Imerys’ markets evolved favorably but remain significantly
below pre-crisis volumes (approx. - 15%). However, part of the growth
results from the Group’s customers’ inventory rebuilding, especially
activities serving industrial equipment markets. The euro weakened
in relation to the dollar for part of 2010. The Group benefited from
this, not only through the translation of dollar sales into euros but also
through the improved competitiveness of its customers (industrial
equipment manufacturers and paper makers, etc.).
Steel production increased significantly, thanks to the dynamism of
emerging zones. Trends were positive in the United States and, to
a lesser extent, Europe.
Global production of printing and writing paper rose + 6% in 2010
compared with the previous year.
Demand remains stable overall in fast-moving consumer goods
(beverages, edible oils, personal care products, etc.).
Construction picked up only slightly in Europe, although positive
advance indicators (housing sales, building permits) are being
published in France. In the United States, the sector has remained
at a very low level for the past 18 months.
Every geographic zone benefited from the upturn in business. Sales
growth in North America (+ 26%) reflects the firmness of the US dollar
against the euro in particular. In emerging countries, sales represent
26% of Group revenues. They grew sharply in China, Brazil and India,
with recent industrial investments a major driving force.
Operating indicators reflect that upturn with current operating income
and margin returning to 2008 levels. Imerys has resumed its external
growth policy, as seen the acquisition of the Brazilian company Pará
Pigmentos S.A. in July 2010.
Showing its confidence in the Group’s prospects, at the Shareholders’
General Meeting on April 28, 2011, the Board of Directors will propose
a + 20% increase in dividends to €1.20 per share. The dividend would
be paid out from May 11, 2011 for a total amount of approximately
€90.6 million, which represents 37.7% of the Group’s share of net
income from current operations.
(€ millions) 2010 2009% current
change
Consolidated Results
Sales 3 346.7 2 773.7 + 20.7%
Current operating income (1) 419.0 248.9 + 68.4%
Operating margin 12.5% 9.0% + 3.5 points
Net current income, Group’s share (2) 240.3 119.3 + 101.6%
Net income, Group’s share 240.8 41.3 n.s.
Financing
Current free operating cash flow (3) 303.1 450.3 - 32.7%
Booked capital expenditure 169.1 118.7 + 42.5%
Shareholders’ equity 2 196.4 1 855.8 + 18,4%
Net financial debt 872.8 964.3 - 9.5%
Data per share (4)
Weighted average number of outstanding shares 75,405,857 72,054,523 + 4.65%
Net income from current operations, Group’s share (2) €3.19 €1.66 + 92.6%
Proposed dividend €1.20 (5) €1.00 + 20.0%
(1) Operating income before other operating revenue and expenses.
(2) Group’s share of net income, before other operating revenue and expenses, net.
(3) Current free operating cash flow: EBITDA deducted from notional tax, changes in working capital requirement and paid capital expenditure.
(4) The weighted average number of outstanding shares was adjusted following the capital increase of June 2, 2009.
(5) Dividend proposed at the Shareholders’ General Meeting on April 28, 2010.
61IMERYS 2010 REGISTRATION DOCUMENT
REPORTS ON THE FISCAL YEAR 2010
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Board of Directors’ Management Report
2.1.2 DETAILED COMMENTARY ON THE GROUP’S RESULTS
❚ SALES
Sales for financial 2010 totaled €3,346.7 million, up + 20.7% from
2009. This increase factors in:
p a Group structure effect of + €23.9 million, chiefly resulting from
the acquisition of the Brazilian company Pará Pigmentos S.A
(PPSA), consolidated from August 1, 2010, and the divestment
of Planchers Fabre (France, May 2009);
p a foreign exchange effect of + €134.0 million, which intensified in
the 2nd half due to the euro’s depreciation against other currencies
on average, in 2010 compared with 2009.
At comparable Group structure and exchange rates, the increase in
sales (+ 15.0% vs. 2009) reflects the overall upturn in sales volumes
(+ 13.1%) in all four business groups. The upturn was sharper for those
that had been most affected by the crisis and inventory reductions in
2009. The price/mix component rose + 1.9% over the year.
The sharp rise in 4th quarter sales (+ 19.5%) should not be extrapolated
into early 2011 as it includes a significant currency translation effect
(+ 5.9%).
At comparable Group structure and exchange rates, 4th quarter sales
are slightly lower than in the second and third quarters, reflecting the
end of restocking as well as adverse weather for Building Materials
activities in particular.
❚ CURRENT OPERATING INCOME
Beyond the limited effects of Group structure and foreign exchange
(- €3.0 million and + €0.2 million, respectively) at comparable Group
structure and exchange rates, current operating income increased
by + €172.9 million compared with 2009. It takes into account the
substantial contribution of sales volumes (+ €161.4 million). The
product price/mix effect was favorable (+ €27.0 million) and the
Group recorded an overall decrease in variable costs (- €22.3 million),
particularly energy bills. Fixed production costs and general expenses
remained under control (+ €74.3 million). More than half the savings
achieved in 2009 (€157.8 million) were carried over into 2010, in line
with the upturn in volumes (labor costs, maintenance).
In the 4th quarter of 2010, the operating margin (11.6%) was impacted
by adverse weather conditions in France, the United Kingdom and the
United States, which disrupted operating conditions and weighed on
the activity mix (drop in construction-related segments in particular).
At 12.5%, the Group’s operating margin gained 3.5 points in 2010
compared with 2009.
❚ NET INCOME FROM CURRENT OPERATIONS
Up + 101.6% to €240.3 million, net income from current operations
reflects:
p The sharp rise in current operating income;
p The improvement in current financial income to - €74.7 million
(- €83.4 million in 2009) that includes, in particular:
• interest expense of - €57.3 million (vs. - €69.1 million in 2009),
reflecting the decrease in average debt from the same period
the previous year,
• a foreign exchange loss of - €4.4 million (- €5.8 million in 2009),
• unwinding of long-term provisions (- €3.4 million) and net
financial expense with respect to pensions (- €2.8 million),
• other financial income/expense (- €6.8 million), including a
- €6.4 million charge on financial instruments;
p A tax charge of - €99.5 million (- €46.2 million in 2009), i.e. an
effective tax rate of 28.9%, compared with 27.9% in 2009.
❚ NET INCOME
The + €199.5 million increase in net income, Group share to
€240.8 million takes into account other income and expense, net
of tax (+ €0.5 million), including in particular the following items,
net of tax:
p Badwill on the acquisition of PPSA, net of acquisition costs
(expenses, restructuring) for a total of €40.2 million;
p Non-recurring financial income resulting from the recording in the
1st half of 2010 of a non-recurring foreign exchange gain of + €6.7
million, following the restructuring of the financing of the Group’s
US subsidiaries (i.e. + €10.2 million before tax);
p Provisions for restructuring and asset depreciation for a total
amount of - €30.7 million (corresponding in particular to the
closure of the Imerys Kiln Furniture site in Spain; in China,
withdrawal from vermiculite activities and depreciation of mining
rights);
p Depreciation expense for site remediation for - €14.2 million: the
review of the environmental situations of the Group’s industrial
sites, carried out in 2010, led to the booking of additional long-
term provisions.
62 2010 REGISTRATION DOCUMENT IMERYS
REPORTS ON THE FISCAL YEAR 2010 2Board of Directors’ Management Report
❚ CASH FLOW
(€ millions) 2010 2009
EBITDA 621.0 416.6
Change in operating working capital (45.7) 235.3
Paid capital expenditure (154.9) (138.4)
Free current operating cash flow (*) 303.1 450.3
Paid financial expense (net of tax) (46.6) (50.4)
Other working capital items 17.7 42.1
Current free cash flow 274.2 442.0
(*) including subsidies, value of divested assets and miscellaneous 3.7 6.3
Operating working capital requirement rose + €45.7 million, in line
with the increase in sales (+ 20.7%). Working capital, therefore,
represents 21.8% of 4th quarter sales on an annual basis.
Excluding the effect of receivables factoring for €71 million (1) , as of
December 31, 2010 that ratio works out at 23.8% (vs. 24.9% as of
December 31, 2009).
Booked capital expenditure totaled €169.1 million, compared with
€118.7 million in 2009. This represents 79% of depreciation expense
(vs. 65% in 2009) and was mainly intended for industrial facility
maintenance and industrial tools and overburden operations.
(1) Factoring contract signed on July 23, 2009 under which transferred receivables are deconsolidated, with the risks and benefits related to receivables transferred to
the factor bank. €83 million in receivables were factored as of December 31, 2009.
(2) Acquisition of 100% of the shares of the company in 2010.
❚ FINANCIAL STRUCTURE
(€ millions) December 31, 2010 June 30, 2010 December 31, 2009
Paid dividends (76.3) (76.0) (63.6)
Net debt 872.8 990.1 964.3
Shareholders’ equity 2,196.4 2,140.5 1,855.8
EBITDA 621.0 319.2 416.6
Net debt / shareholders’ equity 39.7% 46.3% 52.0%
Net debt / EBITDA 1.4x 1.9x 2.3x
Consolidated net financial debt, at €872.8 million, was reduced by
approximately €92 million in 2010. This change takes into account
the following items:
p High current free cash flow at €274.2 million;
p Payment, on May 11, 2010, of €75.5 million in dividends, plus
€0.8 million paid to minority shareholders in subsidiaries;
p The acquisition of Pará Pigmentos S.A. (PPSA) (2) and mining rights
in Pará state (Brazil), for a total amount of €54.1 million.
As of December 31, 2010, Imerys’ total financial resources are almost
€2.2 billion, with no significant repayments due until late 2012. The
average maturity of financial resources is 3.8 years.
63IMERYS 2010 REGISTRATION DOCUMENT
REPORTS ON THE FISCAL YEAR 2010
2
Board of Directors’ Management Report
2.1.3 COMMENTARY BY BUSINESS GROUP
❚ MINERALS FOR CERAMICS, REFRACTORIES, ABRASIVES & FOUNDRY
(32% of the Group’s consolidated sales)
(€ millions) 2010 2009 Current changeComparable
change (1)
Sales 1 105.0 794.5 + 39.1% + 35.2%
Current operating income (2) 134.6 44.0 + 206.4% + 213.3%
Operating margin 12.2% 5.5%
Booked capital expenditure 63.0 46.0 + 37.0%
(1) At comparable Group structure and exchange rates.
(2) Operating income before other operating income and expenses.
Markets
Minerals for Refractories and Abrasives (steel, automotive, industrial
equipment) and Graphite (mobile energy, etc.) markets were heavily
affected by the global economic crisis in 2009. In 2010, they benefited
from the clear upturn in end demand and an inventory rebuilding
effect that lasted until the end of the 3rd quarter.
The upturn in demand was more moderate on Minerals for Ceramics
markets, with construction in developed countries growing only
slightly.
Industrial highlights
To meet the increase in global demand for high quality refractory
minerals, development capital expenditure resumed in andalusite
(refractory mineral for steel, aluminum, cement and glass production).
The business group opened a new conversion unit close to its reserve
in China. Production capacities were extended in South Africa.
Minerals for Ceramics business is developing in new segments
(electro-porcelain, glass fiber) and extending into emerging
economies.
Performance
Sales, at €1,105.0 million for financial 2010, rose + 39.1% from
financial 2009 (which was down - 31.5% from 2008). An analysis of
the variance shows:
p A Group structure effect for - €0.9 million,
p Substantial exchange rate impact at + €31.9 million.
Driven by the sharp rise in volumes, sales also increased due to
higher relative growth in value-added products.
With a threefold increase from 2009, current operating income, at
€134.6 million, includes a + €0.1 million Group structure effect and
a - €3.2 million foreign exchange impact.
At comparable Group structure and exchange rates, the rise in
sales volumes had a very positive effect despite an increase in fixed
production costs. The product price/mix evolved favorably and
variable costs were down slightly from the previous year.
❚ PERFORMANCE & FILTRATION MINERALS
(17% of the Group’s consolidated sales)
(€ millions) 2010 2009 Current changeComparable
change (1)
Sales 594.7 500.7 + 18.8% + 11.7%
Current operating income (2) 64.8 26.9 + 141.1% + 117.3%
Operating margin 10.9% 5.4%
Booked capital expenditure 26.8 10.7 + 150.5%
(1) At comparable Group structure and exchange rates.
(2) Operating income before other operating income and expenses.
64 2010 REGISTRATION DOCUMENT IMERYS
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Markets
In 2010, most of the business group’s end markets reported an
improvement in demand and some inventory rebuilding by customers
and distributors until the 3rd quarter. Growth was higher in fast-
moving consumer goods (beverages, edible oils, personal care
products, etc.) and specialty products for industry (plastics, rubber,
filtration, catalyst, etc.). However, while the construction sector grew
slowly in Europe, no improvement could be seen in the United States.
Industrial highlights
The industrial optimization plan for the Minerals for Filtration activity
in the United States, particularly the renovation of the Lompoc
(California), diatomite plant, enabled the business group to serve
demand effectively in 2010. Mining operations returned to normal.
Performance
Sales totaled €594.7 million for 2010 (+ 18.8%). This increase includes
a foreign exchange impact of + €35.5 million and a Group structure
effect of - €0.3 million. At comparable structure and exchange rates,
the rise in sales reflects the significant upturn in volumes, partly
resulting from inventory rebuilding.
At €64.8 million, current operating income rose + €37.9 million.
It factors in a favorable foreign exchange effect of + €6.4 million.
At comparable structure and exchange rates, the increase was
+ €31.5 million. The sharp upturn in volumes came with a correlated
increase in fixed production costs and general expenses. Income
also reflects the decrease in variable costs and the firm price/mix
component.
❚ PIGMENTS FOR PAPER
(23% of the Group’s consolidated sales)
(€ millions) 2010 2009 Current changeComparable
change (1)
Sales 631.9 719.2 - 12.1% - 14.0%
Current operating income (2) 41.6 60.2 - 30.9% - 34.2%
Operating margin 6.6% 8.4%
Booked capital expenditure 32.5 63.5 - 48.8%
(1) At comparable Group structure and exchange rates.
(2) Operating income before other operating income and expenses.
Markets
Global production of printing and writing paper, which had slumped
heavily in 2009, gradually recovered in 2010 (+ 6.1%) with printers
and distributors rebuilding their paper inventories.
Demand was robust in emerging countries (+ 5.7%) and picked
up strongly in mature countries (+ 6.5%). Moreover, European
papermakers benefited from better competitiveness thanks to the
euro’s depreciation against the American dollar. The European paper
sector carries on consolidating.
Industrial highlights
The business group continued its strategic development in 2010.
The Yueyang precipitated calcium carbonate (PCC) plant (Hunan
province, China), commissioned in the 2nd quarter under a joint
venture, is now fully operational.
In the 2nd half of the year, the business group also acquired the
Brazilian company Pará Pigmentos S.A. (PPSA) and mining rights
in Pará state. This enabled Imerys to increase its reserves of kaolin
for paper and packaging and enhance its industrial and logistical
assets (pipeline and port terminal). Integration has been progressing
according to the acquisition plan since August 1.
Performance
Sales, at €767.1 million in 2010, rose + 21.4%, particularly taking
into account:
p a highly favorable foreign exchange effect of + €42.0 million;
p a + €31.4 million structure effect (acquisition of PPSA, Brazil,
consolidated from August 1, 2010).
At comparable structure and exchange rates, sales growth mainly
reflects the substantial rise in volumes, resulting from:
p the dollar’s depreciation against the euro, which benefited
European paper producers;
p the success of new products intended for the packaging segment
(extra-flat kaolins in the BarrisurfTM and E-TypeTM ranges);
p the opening of new production capacities in India and China.
Current operating income totaled €76.0 mil l ion in 2010
(+ €34.4 million), including a - €5.3 million foreign exchange impact
and a - €2.2 million structure effect. At comparable structure and
exchange rates, the business group’s operating performance
benefited from higher sales volumes and from productivity efforts.
Trends in the price/mix component and variable costs were also
healthy.
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❚ MATERIALS & MONOLITHICS
(28% of the Group’s consolidated sales)
(€ millions) 2010 2009 Current changeComparable
change (1)
Sales 922.6 875.6 + 5.4% + 3.1%
Current operating income (2) 187.5 168.0 + 11.6% + 10.7%
Operating margin 20.3% 19.2%
Booked capital expenditure 14.0 27.3 - 48.7%
(1) At comparable Group structure and exchange rates.
(2) Operating income before other operating income and expenses.
Markets
In France, the improvement in building permits observed for several
quarters was not reflected in new housing starts until late 2010 with
a + 1.7% rise (1) for the year.
Renovation was heavily hit by unfavorable weather in January,
February and December and fell slightly over the year.
In that context, the clay products market recorded a - 2% (2) decrease
in roofing components from the previous year. In the structure
segment, however, growth was strong (+ 11% (2)) thanks to the
ongoing substitution of clay for concrete.
Monolithic Refractories markets benefited from the upturn in
steelmaking and, more generally, industrial activity, which remained
firm throughout the year. The cement, incineration and petrochemicals
segments, which held out better in 2009, grew slightly. New furnace
construction projects remain few.
Industrial highlights
In 2010, capital expenditure was limited to maintenance, industrial
assets having been upgraded in recent years. Furthermore, the
Cuntis (Spain), Kiln Furniture plant was closed.
Performance
Up + 5.4% from 2009, the business group’s 2010 sales
(€922.6 million) takes into account:
p structure effect of - €6.4 million (divestment of Planchers Fabre,
France, May 2009);
p foreign exchange impact of + €26.4 million.
At comparable structure and exchange rates, firm business in
Monolithic Refractories offsets lower sales volumes in Building
Materials.
Current operating income was €187.5 million (+ €19.5 million from
2009). It includes a - €0.8 million structure effect and a + €2.3 million
foreign exchange impact. At comparable structure and exchange
rates, strict cost management offsets the lower relative contribution
of Building Materials.
(1) Source: New single-family housing starts – French Ministry of Ecology, Sustainable Development, Transports and Housing.
(2) Source: FFTB (French roof tiles & bricks federation) – provisional data.
2.1.4 2011 OUTLOOK
As of February 15, 2011, the Group’s economic environment can
currently be analyzed as follows:
p the construction market in France should improve gradually if, as
can be expected, building permits reflect housing starts, from the
second half of the year;
p the US situation is more uncertain: single-family housing
construction is likely to remain very low even if industrial activity
trends appear healthier overall, as steel output suggests;
p European markets other than construction could evolve favorably
if the euro remains competitive in relation to the dollar;
p emerging countries are likely to continue growing;
p cost inflation and currency volatility risks exist.
In that context, unless a major macro-economic event occurs, Imerys
should continue its growth, helped by the development efforts made
in recent years. That growth will nevertheless be assessed in relation
to 2010, which benefited from inventory rebuilding, a significant, non-
recurring event. Moreover, the Group has the financial resources to
seize the value-creating opportunities that arise.
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2.1.5 THE COMPANY’S BUSINESS AND RESULTS IN 2010
The Company made a net profit of €83.6 million in 2010, a
+ €11.7 million increase compared to the previous period.
An operating loss of - €43.2 million was recorded, a - €10.7 million
change compared to the previous year. This trend is due to an
increase in operating expenses of + €9.6 million to €72.0 million. This
increase can mainly be explained by the constitution of a provision for
risks for an amount of €4.1 million corresponding to the future transfer
of treasury shares of the Company as part of free shares plans. At
the same time, operating revenue decreases by + €1.1 million and
reaches €28.7 million.
A financial income of €101.3 million was posted in 2010, compared
with a financial income of €73.6 million in 2009. Indeed, the
Company collected €103.4 million in dividends in 2010, the latter
reached €102.6 million in 2009. The Company also recorded a net
exchange rate gain of + €10.8 million in 2010, against a net gain of
+ €69.2 million recognized in 2009; at the same time net provisions
for foreign exchange risks were increased in 2009 by - €42.1 million
and are decreased in 2010 by + €41.6 million. The foreign exchange
impacts net of provisions thus increase from + €27.1 million in 2009
to + €52.4 million in 2010 and mainly explains the increase in the
financial income. Finally, the net financial expenses increased by
- €0.6 million.
Pursuant to the risk management procedure in force in the Group,
the Company uses forward or optional financial instruments to hedge
the risks inherent in fluctuations in exchange and interest rates and
in energy prices.
The current income amounts to €58.0 million in 2010, against
€41.1 million in 2009.
The exceptional income reached + €0.1 million in 2009. For the
financial year 2010, it amounts to + €2.8 million.
With respect to 2010, Imerys SA recorded a tax revenue of
+ €22.8 million, as a result of the tax consolidation of the Group of
French companies headed by Imerys SA.
The financial debts of Imerys SA increase by €61.8 million in 2010.
The increase in investments of + €165.8 million corresponds to the
capitalization of two loans granted by the Company to its subsidiary
Imerys USA, Inc. for a total amount of €150.3 million and to the share
capital increase of its French subsidiary Mircal Chili for €15.5 million
as well as to the setting up of two new French companies, without
activity to date, with a fully paid-up share capital of €15,000 each
(Parnasse 30 and Parnasse 31). During the financial year 2010, the
Company sold its entire interest in IGM for Fibre Glass (formerly
Parnasse 29) to one of its French subsidiaries. The capitalization
of both loans in the United States largely explains the decrease of
loans related to investments and other subsidiaries for a net amount
of €181.9 million in 2010.
The Board of Directors will propose the payment of a dividend
of €1.20 per share at the Shareholders’ General Meeting of
April 28, 2011, highlighting the Group’s confidence in its future
prospects. This dividend should be paid out from May 11, 2011 for a
total of approximately €90.6 million, i.e. 37.7% of the Group’s share of
consolidated net current income (for information related to allocation
of earnings, see note 34 of the statutory financial statements).
As of December 31, 2010, the Company’s financial debt was made up of the following items:
(€ thousands) AmountMaturity less
than one yearMaturity from
one to five yearsMaturity beyond
five years
Financial debts 2,047,056 1,053,121 404,775 589,860
Other debts 25,567 25,567 - -
Deferred revenue - - - -
Unrealized exchange rate gains 27,806 27,806 - -
Total 2,101,129 1,106,494 404,775 589,860
❚ INVENTORY OF SUBSIDIARIES AND EQUITY INTERESTS AND MARKETABLE SECURITIES
Information concerning subsidiaries and equity interests as of December 31, 2010 can be found in Note 35 of the statutory financial statements.
Information concerning marketable securities as of December 31, 2010 can be found in Note 18 of the statutory financial statements.
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❚ INFORMATION ON CAPITAL AND DISTRIBUTIONS OF DIVIDENDS OVER THE PAST THREE FINANCIAL YEARS
Information concerning the share capital as of December 31, 2010 is available in Notes 19 and 29 of the statutory financial statements, as well
as in chapter 6, paragraph 6.3.1 of the Registration Document.
As of December 31, 2010, the Company’s share capital was made up as follows:
Number of shares % of interest % of voting rights (1)
Pargesa Netherlands BV 19,348,412 25.64% 32.56%
Belgian Securities BV (2) 23,201,353 30.74% 37.76%
M&G Investment Management Ltd (3) 4,890,722 6.48% 4.35%
Vanguard Precious Metal and Mining Funds (4) 3,900,000 5.17% 3.47%
Group employees 210,215 0.28% 0.36%
Owned by the Group 136,373 0.18% -
Public 23,787,080 31.51% 21.50%
Total as of December 31, 2010 75,474,155 100.00% 100.00%
(1) Total net voting rights: 112,234,846.
(2) A 100% subsidiary of Groupe Bruxelles Lambert.
(3) M&G Investment Management Limited is a company belonging to the Prudential Plc group (Great Britain).
(4) Vanguard Precious Metal and Mining Funds is a company belonging to The Vanguard Group, Inc. (United States).
On April 29, 2010, the Board of Directors decided to create 42,984
new shares and thus to increase the Company’s share capital by a
nominal amount of €85,968 by incorporation of reserves, with a view
to serving an equivalent number of free shares definitely acquired
on that date.
On December 16, 2010, the Board of Directors, as part of the
share buy-back programs authorized by the Shareholders’ General
Meetings of April 29, 2009 and April 29, 2010, cancelled 171,627
self-held shares directly acquired on the market by the Company
and totally allocated to the cancellation objective. This cancellation
of shares led to a capital decrease of the Company by a nominal
amount of €343,254.
On January 10, 2011, the Chief Executive Officer, pursuant to the
delegation of powers given to him by the Board of Directors on
December 16, 2010, noted that, on December 31, 2010, the share
capital had been increased by a nominal amount of €426,604 as a
result of the exercise in 2010 of 213,302 treasury shares giving the
right to the same number of Imerys shares.
In addition as of December 31, 2010, the Company holds 136,373
treasury shares at the average unit price of €43.54.
The amount of dividends paid during the past three financial years was as follows:
2010
For the 2009 period
2009
For the 2008 period
2008
For the 2007 period
Gross dividend per share €1.00 €1.00 €1.90
Net dividend per share €1.00 €1.00 €1.90
Total net distribution €75.5 million €62.8 million €118.9 million
For further information on Imerys’ policy with regard to distribution of dividends, see chapter 6, section 6.6 of the Registration Document.
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❚ CAPITAL, OTHER SECURITIES, INCOME AND OTHER KEY INDICATORS OF THE COMPANY FOR THE PAST FIVE FINANCIAL YEARS
Type of indicators (in euros) 2010 2009 2008 2007 2006
I - Capital and other shares at the end of the period
Share capital 150,948,310 150,778,992 125,573,180 126,253,712 126,669,240
Number of ordinary shares at the end of the period 75,474,155 75,389,496 62,786,590 63,126,856 63,334,620
Nominal per share €2 €2 €2 €2 €2
Number of preferred shares (without voting rights) - - - - -
Maximum number of potential ordinary shares
by exercise of options 4,170,563 3,953,269 3,448,082 3,103,391 2,989,870
II - Transactions and income for the period
Pre-tax sales 18,874,414 19,196,891 23,164,643 23,535,868 25,059,348
Income before income taxes, legal profit-sharing and amortization,
depreciation and provisions 19,302,242 83,085,219 43,655,864 37,035,044 92,329,448
Income taxes 22,793,593 30,755,302 56,232,494 27,399,525 22,162,068
Legal employee profit-sharing payable for the period - - - - -
Income after income taxes, legal profit-sharing and amortization,
depreciation and provisions 83,645,325 71,934,964 87,063,223 50,239,678 113,398,743
Distributed income (excluding withholding tax) 75,505,458 62,787,810 118,974,880 114,185,084 104,823,279
III - Earnings per share (1)
Income after income taxes, legal profit-sharing and before
amortization, depreciation and provisions 0.56 1.51 1.59 1.02 1.81
Income after income taxes, legal profit-sharing and amortization,
depreciation and provisions 1.11 0.95 1.39 0.80 1.79
Net dividend per share 1.20 (2) 1.00 1.00 1.90 1.80
IV - Employees
Average number of employees for the period 124.25 125.58 130.33 105.33 98.83
Payroll for the period 13,459,710 11,839,442 11,619,474 10,525,905 8,564,526
Amount paid as social contribution for the period 12,339,268 7,335,249 5,782,541 5,926,112 5,030,033
of which profit-sharing 918,072 356,971 900,000 1,128,996 1,010,532
(1) Based on the number of shares at the end of each period.
(2) Proposed for the approval of the Shareholders’ General Meeting of April 28, 2011.
❚ OTHER INFORMATION
In 2010, no change in accounting methods occurred.
❚ 2010 POST CLOSING EVENTS AND BUSINESS FORECASTS FOR 2011
In 2011, the Company will pursue its activity of holding and, more particularly, of providing services to its subsidiaries and will continue to
manage financial risks for the entire Group.
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❚ SUPPLIER PAYMENT TERMS ACCORDING TO THE “LOI DE MODERNISATION DE L’ECONOMIE” DATED AUGUST 4, 2008 (“LME LAW”)
Pursuant to article L. 441-6-1 of the French Code of Commerce, the amount of trade payables by maturity is given below:
Payables as of December 31, 2010
(€ thousands) Total < 30 days from 31 to 60 days > 61 days
Group suppliers 3,112 3,065 22 25
Non Group suppliers 1,390 1,238 74 78
Trade payables 4,502 4,303 96 103
Payables as of December 31, 2009
(€ thousands) Total < 30 days from 31 to 60 days > 61 days
Group suppliers 2,447 2,159 42 246
Non Group suppliers 1,202 1,155 18 28
Trade payables 3,649 3,314 61 274
The present Management Report by the Board of Directors draws on detailed information from the following chapters of the present
Registration Document, in particular:
p Sustainable Development, Environment, Human Resources data, Risks (Chapter 1 – Presentation of the Group).
p Innovation, Research & Technology (Chapter 1 – Presentation of the Group).
p Composition and functioning of the Board of Directors, list of offices and functions held by corporate officers and amount of
compensation; benefits of corporate officers, stock options and free shares; corporate officers’ transactions in Imerys securities
(Chapter 3 – Corporate Governance).
p Risk factors (Chapter 4 – Risks and internal control).
p Main subsidiaries and affiliates (Chapter 5 – Financial statements).
p Changes in accounting methods (Chapter 5 – Financial statements).
p Use of financial instruments (Chapter 5 – Financial statements).
p Subsequent events (Chapter 5 – Financial statements).
p Information on share capital (including Group employees’ interest in the capital of the Company and table summarizing existing financial
authorizations and share buyback programs) and items likely to have an impact in the event of a public offer (Chapter 6 – Additional
information).
70 2010 REGISTRATION DOCUMENT IMERYS
REPORTS ON THE FISCAL YEAR 2010 2Auditors’ Reports
2.2 | AUDITORS’ REPORTS
ERNST & YOUNG et Autres
41, rue Ybry
92576 Neuilly-sur-Seine Cedex
S.A.S. with variable capital
Statutory Auditor
Member of the Compagnie régionale de Versailles
Deloitte & Associés
185, avenue Charles-de-Gaulle
92524 Neuilly-sur-Seine Cedex
S.A. with share capital of €1,723,040
Statutory Auditor
Member of the Compagnie régionale de Versailles
2.2.1 STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
Fiscal year ended December 31, 2010
(This is a free translation into English of the statutory auditors’ report on the consolidated financial statements issued in the French language and is provided
solely for the convenience of English speaking users.
The statutory auditors’ report includes information specifically required by French law in such reports, whether modified or not. This information is presented
below the opinion on the consolidated financial statements and includes explanatory paragraphs discussing the auditors’ assessments of certain significant
accounting and auditing matters. These assessments were made for the purpose of issuing an audit opinion on the consolidated financial statements taken
as a whole and not to provide separate assurance on individual account captions or on information taken outside of the consolidated financial statements.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France).
To the Shareholders,
In compliance with the assignment entrusted to us by your Annual General Meeting, we hereby report to you, for the year ended December
31, 2010 on:
p the audit of the accompanying consolidated financial statements of Imerys;
p the justification of our assessments;
p the specific verification required by law.
The consolidated financial statements have been approved by the Board of Directors. Our role is to express an opinion on these financial
statements based on our audit.
I. OPINION ON THE CONSOLIDATED FINANCIAL STATEMENTS
We conducted our audit in accordance with professional standards applicable in France. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit
includes examining, using sample testing techniques or other selection methods, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made, as well
as evaluating the overall financial statement presentation. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of the
Group as at December 31, 2010 and of the results of its operations for the year then ended in accordance with the IFRSs as adopted by the
European Union.
Without qualifying our opinion, we draw your attention to the matter set out in Note 2 to the consolidated financial statements relating to the
changes in accounting policies.
II. JUSTIFICATION OF OUR ASSESSMENTS
In accordance with the requirements of article L. 823-9 of the French Company Law (code de commerce) relating to the justification of our
assessments, we bring to your attention the following matters:
p Your company performs annual goodwill impairment tests and also assesses whether there is any indication of impairment in long-term
assets, under the terms and conditions described in Notes 4.9, 4.13 and 19 to the consolidated financial statements. Our procedures
consisted in analyzing the procedures performed to implement those impairment tests and assumptions used and in verifying that the
notes 4.9, 4.13 and 19 provide appropriate disclosures.
71IMERYS 2010 REGISTRATION DOCUMENT
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Auditors’ Reports
p Your company has to confront litigation and a range of management, environmental, legal and social security risks. As stated in Note 24.2
to the consolidated financial statements, with support from its outside advisors, your Company is evaluating the amounts and probabilities
of settlement of all of the litigation and risks identified. We have taken note of the various bases for the estimates and the documentation
available. We assessed the reasonableness of these estimates.
These assessments were made as part of our audit approach for the consolidated financial statements taken as a whole and thus contributed
to the opinion expressed in the first part of this report.
III. SPECIFIC VERIFICATION
As required by law we have also verified in accordance with professional standards applicable in France the information presented in the
Group’s management report.
We have no matters to report regarding the fair presentation and its consistency with the consolidated financial statements.
Neuilly-sur-Seine, March 30, 2011
The Statutory Auditors
French original signed by
ERNST & YOUNG et Autres
François Carrega
Deloitte & Associés
Arnaud de Planta
72 2010 REGISTRATION DOCUMENT IMERYS
REPORTS ON THE FISCAL YEAR 2010 2Auditors’ Reports
2.2.2 STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS
Fiscal year ended December 31, 2010
(This is a free translation into English of the statutory auditors’ report issued in the French language and is provided solely for the convenience of English
speaking readers. This report includes information specifically required by French law and this is presented below the opinion on the financial statements. This
information includes an explanatory paragraph discussing the auditors’ assessments of certain significant accounting matters. These assessments were made
for the purpose of issuing an opinion on the financial statements taken as a whole and not to provide separate assurance on individual account captions or on
information taken outside of the financial statements. The report also includes information relating to the specific verification of information in the management
report. This report should be read in conjunction with French law and professional auditing standards applicable in France).
To the Shareholders,
In compliance with the assignment entrusted to us by your Annual General Meeting, we hereby report to you, for the year ended December 31, 2010 on:
p the audit of the accompanying financial statements of Imerys,
p the justification of our assessments,
p the specific verifications and information required by law.
The financial statements have been approved by the Board of Directors. Our role is to express an opinion on these financial statements, based on
our audit.
I. OPINION ON THE FINANCIAL STATEMENTS
We conducted our audit in accordance with professional standards applicable in France. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, using
sample testing techniques or other selection methods, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made, as well as evaluating the overall financial statement presentation.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In our opinion, the financial statements present fairly, in all material respects, the financial position of Imerys at December 31, 2010 and the results of
its operations for the year then ended, in accordance with the accounting rules and principles applicable in France.
II. JUSTIFICATION OF ASSESSMENTS
In accordance with the requirements of article L. 823-9 of the French Company Law (code de commerce) relating to the justification of our assessments,
we bring to your attention the following matter:
Investments in subsidiaries are valued by taking into account both percentage of shareholders’ equity they represent and future profitability forecasts
as stated in the accounting policies note to the financial statements concerning long-term investments. Our procedures consisted in assessing
the data and the assumptions on which these estimates are based and reviewing the calculations performed by the Company. We assessed the
reasonableness of such estimates.
These assessments were made as part of our audit approach for the financial statements taken as a whole and thus contributed to the opinion
expressed in the first part of this report.
III. SPECIFIC VERIFICATIONS AND INFORMATION
We have also performed, in accordance with professional standards applicable in France, the specific verifications required by French law.
We have no matters to report as to the fair presentation and consistency with the financial statements of the information given in the Board of Directors’
management report and in the documents addressed to shareholders with respect to the financial position and the financial statements.
Concerning the information given in accordance with the requirements of article L. 225-102-1 of the French Company Law (code de commerce)
relating to remunerations and benefits received by the directors and any other commitments made in their favour, we have verified its consistency with
the financial statements, or with the underlying information used to prepare these financial statements and, where applicable, with the information
obtained by your Company from companies controlling your Company or controlled by it. Based on this work, we have the following observation to
make regarding to the accuracy and fair presentation of this information:
As specified in the management report, this information was prepared in accordance with the AMF recommendation of December 22, 2008. It
therefore does not include the remuneration and benefits granted by the companies controlling your Company to the relevant company officers with
respect to other directorships, roles or engagements other than those performed in or on behalf of the Imerys group.
In accordance with French law, we have ensured that the required information concerning the identity of the shareholders and holders of voting rights
has been properly disclosed in the management report.
Neuilly-sur-Seine, March 30, 2011
The Statutory Auditors
French original signed by
ERNST & YOUNG et Autres
François Carrega
Deloitte & Associés
Arnaud de Planta
73IMERYS 2010 REGISTRATION DOCUMENT
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2.2.3 STATUTORY AUDITORS’ SPECIAL REPORT ON REGULATED AGREEMENTS AND COMMITMENTS WITH THIRD PARTIES
Fiscal year ended December 31, 2010
(This is a free translation into English of the Statutory Auditors’ special report on regulated agreements and commitments with third parties that is issued in the
French language and is provided solely for the convenience of English speaking readers. This report on regulated agreements and commitments should be
read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France. It should be understood that
the agreements reported on are only those provided by the French Company Law (Code de commerce) and that the report does not apply to those related
party transactions described in IAS 24 or other equivalent accounting standards).
To the Shareholders,
In our capacity as Statutory Auditors of your Company, we hereby report to you on regulated agreements and commitments with third parties.
The terms of our engagement require us to communicate to you, based on information provided to us, the principal terms and conditions of those
agreements and commitments brought to our attention or which we may have discovered during the course of our audit, without expressing an
opinion on their usefulness and appropriateness or identifying such other agreements, if any. It is your responsibility, pursuant to Article R. 225-31
of the French Company Law (Code de commerce), to assess the interest involved in respect of the conclusion of these agreements for the purpose
of approving them.
Our role is also to provide you with the information provided for in Article R. 225-31 of the French Company (Code de commerce) Law in respect of the
performance of the agreements and commitments, already authorized by the Shareholders’ Meeting and having continuing effect during the year, if any.
We conducted our procedures in accordance with the professional guidelines of the French National Institute of Statutory Auditors (Compagnie
Nationale des Commissaires aux Comptes) relating to this engagement. These guidelines require that we agree the information provided to us with
the relevant source documents.
AGREEMENTS AND COMMITMENTS SUBMITTED TO THE APPROVAL OF THE SHAREHOLDERS’ MEETING
Agreements and commitments authorized in 2010
Pursuant to Article L.225-40 of the French Company Law (Code de commerce), the following agreements and commitments, which were previously
authorized by your Board of Directors, have been brought to our attention application.
Regulated agreements and commitments entered into in favor of Mr. Gilles Michel, Deputy CEO and Director, as authorized by the Board of Directors at its November 3, 2010 meeting:
Group defined benefit retirement plan
The main characteristics of this plan are as follows:
p beneficiary category: all senior executives or corporate officers of Imerys SA, and members of the Executive Committee, having at least 10 years of
seniority within the Imerys Group as of the settlement date of his retirement benefits, including having been a member of the Executive Committee
during at least two years;
p life annuity:
• total annual gross amount (after having taken into account pension benefits from mandatory and complementary retirement plans including
the defined benefit plan described below) and 60% of the beneficiary’s reference salary, which is limited to 22 times the amount of the
Social Security Annual Ceiling (“22 PASS”);
• subject to a payment capped at a maximum of 25% of the 22 PASS;
• optional reversion annuity paid to the surviving spouse(s), pro-rated to the duration of the marriage;
p reference salary to be used: average of the beneficiary’s last two years of compensation (fixed and variable).
The total estimated amount of the commitment for Mr. Gilles Michel amounts to €93.9 thousand as of December 31, 2010.
Group defined contribution retirement plan
This plan, the management of which is entrusted to an insurance company, provides for a contribution equal to 8% of the compensation of the eligible
beneficiaries, capped at 8 times the PASS, jointly funded by the beneficiary, for up to 3%, and by the Company, for up to 5%; the vested rights are,
when necessary, allocated to the guaranteed retirement benefits provided for in the Group defined benefit retirement plan.
Your Company paid contributions to this plan amounting to €3,615.85 in 2010.
Unemployment insurance/Guaranteed unemployment benefits for senior executives and corporate officers of the Company (“GSC”)
In his capacity as a corporate officer of the Company, Mr. Gilles Michel benefits from guaranteed unemployment benefits for senior executives and
corporate officers, subscribed to by your Company.
Your Company paid contributions to this unemployment insurance plan amounting to €2,196.50 in 2010.
74 2010 REGISTRATION DOCUMENT IMERYS
REPORTS ON THE FISCAL YEAR 2010 2Auditors’ Reports
Severance pay
Severance pay will be paid should Mr. Gilles Michel be discharged from his duties as a corporate officer either at the Company’s initiative or in the
event of a forced departure related to a change in control or strategy, determined as follows:
p amount: calculated based on a maximum of 2 years of compensation (fixed + variable):
• should his term of office be more than two years, severance pay will be equal to the amount of his fixed compensation for the last
24 months, to which will be added an amount equal to his variable compensation in respect of the last two fiscal years;
• should his term of office be between one and two years, the compensation will be equal to twice the amount of his fixed compensation
of last 12 months, to which will be added an amount equal to twice the amount of his annual variable compensation;
• should his term of office be less than one year, the severance pay will be equal to two years of his annual fixed compensation, or
€1,600,000, to which will be added an amount equal to 70% of this amount, equivalent to his current target bonus, or €1,120,000.
p Performance condition: assessed using the arithmetic average of the percentage of economic and financial objectives realized over the last
three fiscal years, that are used to determine the variable compensation in respect of each of these fiscal years, as follows:
• if the average percentage of targets achieved (calculated over the last 3 relevant fiscal years) is less than 40%, no severance pay would
be paid;
• if this percentage is between 40 and 80%, the compensation would be determined on a linear basis between the two thresholds
corresponding to 50% and 100% of the maximum severance pay;
• if this percentage exceeds 80%, the maximum severance pay would be paid.
In the event of departure before reaching three complete years, the performance conditions would be assessed as follows:
• in the event of departure before three complete years, the arithmetic average of the percentage of economic and financial objectives
realized over the last two complete years, would be used;
• in the event of departure before two complete years, the arithmetic average of the percentage of economic and financial objectives
realized over the last complete year, would be used;
• in the event of departure before one complete year: 70% of the objectives would be considered as having been met.
No severance pay would be in the event of a voluntary departure by Mr. Gilles Michel or should he have the possibility of triggering his retirement
benefits in the short term.
AGREEMENTS AND COMMITMENTS ALREADY APPROVED BY THE SHAREHOLDERS’ MEETING
Agreements and commitments approved during previous years and having continuing effect in 2010
In addition, pursuant to Article R.225-30 of the French Company Law (Code de commerce), we have been advised that the following agreements
and commitments, authorized in previous years by the Shareholders’ Meeting, have had continuing effect during the year.
Group defined benefit retirement plan
This defined benefit retirement plan was set up, in particular, for Mr. Gérard Buffière, CEO and Director, and Mr. Jérôme Pecresse, Deputy CEO. It
provides for the payment of a life annuity as from the settlement date of their retirement benefits, under the conditions described above.
The total estimated amount of the commitment for Messrs. Gérard Buffière and Jérôme Pecresse totals €5,527.4 thousand as of December 31, 2010.
Defined contribution retirement plan
This additional defined contribution retirement plan was set up, in particular, for Mr. Jérôme Pecresse, Deputy CEO, as an employee of the Company.
This plan, which capitalizes funds, provides for a contribution of 8% of the compensation of eligible employees under the conditions set out above.
Your Company paid contributions to this plan amounting to €13,848 in 2010.
Amendment to the employment agreement of Mr. Gérard Buffière, CEO and Director:
This amendment to the employment agreement of Mr. Gérard Buffière was approved to make it compliant with Law no. 2007-1223 of August 21, 2007,
intended to promote work, employment and purchasing power (the so-called “TEPA Act”) provides that Mr. Gérard Buffière will receive termination
benefits, equal to two years gross salary, should he leave at the Company’s initiative, subject to a performance criteria. The performance criteria used
is the annual net current income of your Company for all years during the successive terms of office of Mr. Gérard Buffière since his appointment as
Chairman of the Management Board, with two possible annual exceptions.
Neuilly-sur-Seine, March 30, 2011
The Statutory Auditors
French original signed by
ERNST & YOUNG et Autres
François Carrega
Deloitte & Associés
Arnaud de Planta
33.1 BOARD OF DIRECTORS 76
3.1.1 Powers 76
3.1.2 Composition 77
3.1.3 Information on the Directors 79
3.1.4 Functioning 88
3.1.5 Implementation of best Corporate Governance practices 88
3.2 EXECUTIVE MANAGEMENT 953.2.1 Powers 95
3.2.2 Composition 95
3.2.3 Other information and offi ces of the members of the Executive Management as of December 31, 2010 95
3.2.4 Executive Committee 95
3.3 COMPENSATION 963.3.1 Board of Directors 96
3.3.2 Executive Management 98
3.4 STOCK OPTIONS 1013.4.1 Stock option plans in force 101
3.4.2 Conditional stock options granted by the Company to its Executive Corporate Offi cers in 2010 103
3.4.3 Details of stock option plans in force 104
3.5 FREE SHARES 1063.5.1 Conditional free share plans in force 106
3.5.2 Performance shares granted by the Company to its Executive Corporate Offi cers in 2010 107
3.6 SPECIFIC TERMS AND RESTRICTIONS APPLICABLE TO GRANTS TO EXECUTIVE CORPORATE OFFICERS 108
3.7 CORPORATE OFFICERS’ TRANSACTIONS IN SECURITIES IN THE COMPANY 109
CORPORATE
GOVERNANCE
76 2010 REGISTRATION DOCUMENT IMERYS
CORPORATE GOVERNANCE 3Board of Directors
Since May 3, 2005, the Company has been organized as a French
Limited Liability Company (Société Anonyme) with a Board of
Directors. On the same time, it also opted to dissociate the duties of
Chairman of the Board of Directors and of Chief Executive Officer.
These positions are held respectively by Mr. Langlois-Meurinne
and Mr. Buffière, both of whom expressed the wish not to seek
the renewal of their term of office which will expire following the
Shareholders’ General Meeting of April 28, 2011. Consequently, the
Board announced, upon the appointment of Mr. Gilles Michel as
Director and Deputy Chief Executive Officer in November 2010, that
it intended to merge the duties of Chairman of the Board and Chief
Executive Officer and to appoint Mr. Gilles Michel to perform them.
The Board of Directors confirmed those intentions at its meeting
of February 15, 2011 and stated that it also intended to appoint a
Vice-Chairman as Lead Director, who would assist the Chairman
in organizing the work of the Board and its Committees and in
the Company’s relations with its controlling shareholders, while
making sure that best practices are applied in terms of Corporate
Governance. The Board expressed its intention to assign these
functions to Mr. Langlois-Meurinne, subject to the renewal of his
Directorship at the next Shareholders’ General Meeting.
This governance structure, adopted by the great majority of stock
market-listed French companies with a Board of Directors, would
simplify the Company’s operational management in order to further
improve its efficiency. Furthermore, it would provide for a harmonious
transition of offices between the current incumbents and Mr. Gilles
Michel, while taking into account the presence of controlling
shareholders in the Company’s capital and the application of best
Corporate Governance practices.
The Company complies with the French regulations to which it is
subject with respect to Corporate Governance.
The AFEP-MEDEF Corporate Governance Code, as amended by the
new recommendations of April 19, 2010, is used by the Company as
a reference in drawing up the report provided for in article L. 225-37
of the French Code of Commerce, pursuant to the law of July 3, 2008
transposing the European directive 2006/46/EC of June 14, 2006
(this code is available on the website www.imerys.com, in the “Our
Group/Corporate Governance” section).
3.1 | BOARD OF DIRECTORS
3.1.1 POWERS
Pursuant to legal and statutory provisions, the Board of Directors:
p appoints and, as the case may be, dismisses the Chairman and
the Chief Executive Officer and, as the case may be, on the
Chief Executive Officer’s proposal, one or more Delegate Chief
Executive Officers;
p constantly controls the management of the Company by the Chief
Executive Officer.
For the purposes of that control and in accordance with article 16
of the by-laws:
p the Board of Directors makes the checks and controls that it
judges appropriate at any time of the year. It may obtain any
documents that it judges useful for carrying out its mission;
p the Chief Executive Officer periodically presents a report to the
Board of Directors on the status and running of Company affairs,
which is drawn up in the conditions requested by the Board of
Directors. The report includes the presentation of the Group’s
quarterly and half-yearly financial statements;
p within three months of closing the financial year, the Executive
Management presents the Company’s annual f inancial
statements, the Group’s consolidated financial statements and
his report on the financial year just ended to the Board of Directors
for its review and control. The Board of Directors settles those
financial statements and the terms of its Management Report
to be presented to the annual Shareholders’ General Meeting;
p the Executive Management submits to the Board of Directors his
annual operating objectives for the year ahead and, periodically,
his long-term strategic projects.
Furthermore, pursuant to the provisions of the Board of Directors’
Internal Charter, the Board examines and approves the following
prior to their implementation, with respect to the general powers
granted to it by law:
p the strategic orientations of the Company and Group and any
operations likely to significantly influence such orientations; it also
periodically examines the long-term strategic plan (multiyear plan)
drawn up or revised by the Chief Executive Officer;
p the following operations, for which the amount per operation is
greater than the threshold of €75 million set by the Board of
Directors:
• any operations likely to modify the financial structure and
scope of business of the Company and the Group, and any
commercial or industrial agreements that bind the future of the
Company or the Group,
• the acquisition of an interest in, takeover or disposal - and any
operation that may be considered, from an economic point of
view, as the acquisition of an interest, takeover or disposal - of
any fixed asset;
p as the case may be, the allocation of management tasks between
the various Delegate Chief Executive Officers, as proposed by
the Chief Executive Officer;
77IMERYS 2010 REGISTRATION DOCUMENT
CORPORATE GOVERNANCE
3
Board of Directors
p the permanent delegation by the Chief Executive Officer of part of
his or her powers in favor of a third party (i.e. not being a Director)
with a view to carrying out one or more defined transactions;
p more generally, any commitment by the Company or the Group
that may constitute a regulated agreement, in accordance with
the law.
Finally, the Board of Directors grants any specific delegations of its
powers to the Chief Executive Officer, within the limits and conditions
set down by law, for the purposes of:
p the granting by the Company of any personal security (such as
third-party guarantees and endorsements) or of any security on
its assets, within the limit of a total amount determined in principle
every year;
p making, pursuant to the authorizations granted to the Board of
Directors by the Shareholders’ General Meeting, purchases by the
Company of its own shares or certain capital increase operations;
p carrying out issues of ordinary bonds in one or more times.
3.1.2 COMPOSITION
The Board of Directors is currently composed of sixteen members.
Their term of office is three years and one third of members are
renewed each year.
The composition of the Board of Directors is designed to allow the
Group to benefit from the diverse and international professional
experience of its members and to involve the representatives of
Imerys’ controlling shareholders in the definition and implementation
of the Group’s strategy.
❚ CHANGES IN 2010
The Company’s shareholders, at their Ordinary and Extraordinary
General Meeting of April 29, 2010, decided to:
p renew the terms of office as Directors of Mr. Jean Monville,
Mr. Robert Peugeot and Mr. Amaury de Sèze for a further period
of three years, i.e. until the end of the Shareholders’ General
Meeting called in 2013 to rule on the financial statements for
financial 2012;
p appoint, for the same 3-year period, four new Directors: Ms. Fatine
Layt, Messrs. Ian Gallienne and Pierre-Jean Sivignon as well as
Mr. Olivier Pirotte in replacement of Mr. Thierry Rudder whose
term of office expired and who did not seek its renewal.
In addition, the Board of Directors at its meeting of November 3, 2010
decided to appoint Mr. Gilles Michel as new Director of the Company
in replacement of Mr. Gilbert Milan, who resigned, for the remaining
duration of the term of the latter, i.e. until the end of the Shareholders’
General Meeting called upon in 2012 to approve management and
financial statements for financial 2011. In accordance with the law,
the appointment of Mr. Gilles Michel as Director of the Company will
be submitted for ratification at the very next Shareholders’ General
Meeting. Mr. Gilles Michel was also appointed by the Board, as from
that date, as Deputy Chief Executive Officer of the Company until
the Shareholders’ General Meeting called upon in 2011 to approve
management and financial statements for financial 2010.
78 2010 REGISTRATION DOCUMENT IMERYS
CORPORATE GOVERNANCE 3Board of Directors
❚ COMPOSITION
On the date of the present Registration Document, the composition of the Board of Directors is as follows:
Name Age Nationality PositionDate of 1st
appointmentYear of renewal
of term of office (1)
Number of shares
owned as on
December 31, 2009
Independent member
Aimery LANGLOIS-MEURINNE 67 French Chairman 09/22/1987 2011 80,000 No (2)
Gérard BUFFIÈRE 66 French
Director and Chief
Executive Officer 05/03/2005 2011 78,886 (3) No (4)
Gilles MICHEL 54 French
Director and Deputy
Chief Executive
Officer 11/03/2010 2012 100 No (5)
Aldo CARDOSO 55 French Director 05/03/2005 2011 1,680 Yes
Jacques DRIJARD 68 French Director 09/25/1996 2012 720 No (2) (6)
Ian GALLIENNE 40 French Director 04/29/2010 2013 100 No (2)
Fatine LAYT 43 French Director 04/29/2010 2013 100 Yes
Jocelyn LEFEBVRE 53
Franco-
Canadian Director 06/16/1994 2012 1,080 No (2)
Eric LE MOYNE de SÉRIGNY 64 French Director 06/12/1996 2012 795 No
Maximilien de LIMBURG STIRUM 39
Franco-
Belgian Director 05/03/2005 2011 720 No (2)
Jean MONVILLE 66 French Director 05/02/2007 2013 720 Yes
Robert PEUGEOT 60 French Director 11/04/2002 2013 704 Yes
Olivier PIROTTE 44 Belgian Director 04/29/2010 2013 600 No (2)
Amaury de SÈZE 65 French Director 07/30/2008 2013 8,016 No (2)
Pierre-Jean SIVIGNON 54 French Director 04/29/2010 2013 100 Yes
Jacques VEYRAT 48 French Director 05/03/2005 2011 600 Yes
Total of members: 16 174,921 (7) 6
(1) The exact date of the renewal will be the date of the General Meeting called to rule on the Company’s financial statements for the previous year.
(2) Director representing a majority shareholder in the Company.
(3) Gérard Buffière also holds 56.287 units in FCPE Imerys Actions, created under employee shareholder plans (see chapter 6, paragraph 6.2.5 of the Registration
Document); the assets of these funds are mainly invested in Imerys shares.
(4) Chief Executive Officer of the Company.
(5) Deputy Chief Executive Officer of the Company.
(6) Former executive of the Company.
(7) i.e. 0.23% of capital and 0.26% of voting rights as on December 31, 2010.
The minimum number of shares required to be a member of the
Board of Directors is set at 100 by the by-laws. The Board’s Internal
Charter increased that number to 600 Imerys shares to be acquired
by each Director within a year of his or her appointment. In that
respect, the Company’s controlling shareholder groups, which are
represented on the Board of Directors by seven members, together
hold 42,549,765 shares as of December 31, 2010 (see chapter 6,
paragraph 6.3.1 of the Registration Document).
Pursuant to statutory provisions, the terms of office of Chairman,
Vice-Chairman and Member of the Board of Directors end ipso jure
following the General Meeting that rules on the financial statements
and management for the financial year during which the incumbent
of either position reaches the age of 70.
Furthermore, as on the date of the present Registration Document,
three members of the Board of Directors are not solely French
nationals and six are considered “independent”. This proportion of
independent members in the composition of the Board of Directors
(6 out of 16) is greater than the one-third recommended by the AFEP-
MEDEF Corporate Governance Code for companies with controlling
shareholders.
The definition of independence retained by the Board of Directors
at its meeting of May 3, 2005 on the proposal of its Appointments
& Compensation Committee and confirmed since then each year
is “the lack of any relationship between a member of the Board of
Directors and Imerys, its Group or its management that could affect
the exercise of his or her freedom of judgment.”
79IMERYS 2010 REGISTRATION DOCUMENT
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Board of Directors
In accordance with the recommendations of the AFEP-MEDEF
Corporate Governance Code, the Board stated in its Internal Charter
that the independence criteria user (1) were neither exclusive of
independent status if none of them was met, nor necessarily sufficient
for that status to be granted. A member’s independence must be
appraised according to his or her particular personal situation or
that of the Company, with respect to his or her shareholding or for
any other reason.
❚ CHANGES PLANNED IN 2011
After the examination and opinion given by the Appointments &
Compensation Committee, the Board will put to the Shareholders
at the General Meeting of April 28, 2011 to:
p renew the terms of office as Directors of Mr. Aimery Langlois-
Meurinne, Mr. Gérard Buffière, Mr. Aldo Cardoso, Mr. Maximilien
de Limburg Stirum and Mr. Jacques Veyrat for a further period of
three years, i.e. until the end of the Shareholders’ General Meeting
called in 2014 to rule on the financial statements for financial 2013;
p appoint for the same 3-year period, Ms. Arielle Malard de
Rothschild as new Director.
In accordance with the principles used by the Company with
respect to the qualification of its Directors as independent, and
after examination of their personal situation, the Appointments &
Compensation Committee recognized that status to Ms. Arielle
Malard de Rothschild and to Messrs. Aldo Cardoso and Jacques
Veyrat but not to Messrs. Aimery Langlois-Meurinne and Maximilien
de Limburg Stirum, as representatives of controlling shareholders,
nor to Mr. Gérard Buffière, Chief Executive Officer.
Information on Directors whose terms of office’s renewal will be put
to the Shareholders’ General Meeting appears in paragraph 3.1.3
of the present chapter; the information on Ms. Arielle Malard de
Rothschild as new applicant appears in chapter 7, paragraph 7.1 of
the Registration Document.
As mentioned at the beginning of the present chapter, and subject
to the decision of the Board on April 28, 2011 to merge the duties of
Chairman of the Board of Directors and of Chief Executive Officer,
Mr. Gilles Michel would hold these duties; on the same time,
Mr. Aimery Langlois-Meurinne, subject to the renewal of his term
of office as Director, would be appointed Vice-Chairman as Lead
Director.
(1) For its application, the Board decided that their being in one or more of the following situations was likely to affect that freedom of judgment:
- an employee, corporate officer or Director (or similar) of a subsidiary of Imerys, of its controlling shareholders or major shareholders (i.e. with a share of over 10%
of its capital) or having been one in the past five years;
- a corporate officer or Director (or similar) of a company in which Imerys, one of its employees or another corporate officer of Imerys (now or in the past five years)
is a Director (or similar);
- a significant customer, supplier or banker of Imerys or its Group;
- a close relation of a corporate officer of Imerys;
- an auditor of Imerys in the past five years;
- a Director (or similar) of Imerys for more than 12 years.
(2) As notified individually to the Company by each of the Board of Directors members concerned, in function as of December 31, 2010.
3.1.3 INFORMATION ON THE DIRECTORS (2)
❚ MAIN ACTIVITY AND OTHER RESPONSIBILITIES OF THE MEMBERS OF THE BOARD OF DIRECTORS
Aimery LANGLOIS-MEURINNE
Chairman of the Board of Directors
Born on May 27, 1943
Work address: Pargesa Holding S.A. – 11, Grand-Rue – 1204 Geneva (Switzerland)
A doctor of law and graduate of Institut d’Etudes Politiques, Paris and Ecole Nationale d’Administration (Robespierre class), Paris, Aimery
Langlois-Meurinne began his career in 1971 with Paribas where, for 11 years, he was successively Consultant Engineer, Industrial Delegate
in Japan, Assistant Vice-President then Deputy Vice-President in charge of the Asia-Pacific department and, finally, Deputy Vice-President in
charge of the international financial operations department. He then joined AG Becker Paribas in New York as Managing Director and member
of the Executive Committee, then Merrill Lynch Capital Markets (New York), where he held the position of Managing Director. In 1987, he joined
Parfinance as Chief Executive Officer before becoming its Vice-Chairman & Chief Executive Officer in 1990, when he was also appointed
Director and until January 2010 Chief Executive Officer of Pargesa Holding S.A. (Switzerland).
List of activities and other responsibilities in 2010:
MAIN ACTIVITY: ● Chairman of the Board of Directors: Imerys.
OTHER RESPONSIBILITIES: ● Director-Chairman: Pargesa Luxembourg S.A. (Luxembourg); Pargesa Netherlands BV (Netherlands).
● Director: Audiris, IDI, PAI Partners, Société Française Percier Gestion “SFPG”, Société de la Tour Eiffel (France).
80 2010 REGISTRATION DOCUMENT IMERYS
CORPORATE GOVERNANCE 3Board of Directors
List of activities and other responsibilities that expired during the last five years:
● Director-Chief Executive Officer: Pargesa Holding S.A. (Holding company - Switzerland).
● Director and Vice-Chairman of Investment Committee and Management Committee: Sagard Private Equity Partners
(France).
● Director: Groupe Bruxelles Lambert S.A. (Belgium); Club Méditerranée, Eiffage, PAI Management (France); Pascal
Investment Advisers SA (Suisse).
Gérard BUFFIÈRE
Director and Chief Executive Officer
Born on March 28, 1945
Work address: Imerys – 154, rue de l’Université – 75007 Paris (France)
A graduate of Ecole Polytechnique, Paris with a Master of Sciences from Stanford University (United States), Gérard Buffière began his career
in 1969 in the French group Banexi. After holding various positions with the American group Otis Elevator, in 1979 he joined the international
group Schlumberger, where he held various positions before becoming Chairman of the Electronic Transactions divisions in 1989. His career
continued as Chief Executive Officer of the Industrial Equipment division of the French group Cegelec in 1996. He joined the Imerys group in
March 1998 where he was appointed Vice-President Building Materials. In 1999, he became Vice-President Building Materials and Ceramics
& Specialties. In 2000, he took charge of the Pigments & Additives business group, then the Pigments for Paper business group until 2003.
Chief Executive Officer from January 1, 2003 to May 3, 2005, Gérard Buffière was appointed Director and confirmed as Chief Executive Officer
of Imerys as from that date.
List of activities and other responsibilities in 2010:
MAIN ACTIVITY: ● Director and Chief Executive Officer: Imerys.
OTHER RESPONSIBILITIES: ● None.
List of activities and other responsibilities that expired during the last five years:
● None.
Aldo CARDOSO
Director
Born on March 7, 1956
Address: 45, boulevard de Beauséjour – 75016 Paris (France)
A graduate of Ecole Supérieure de Commerce, Paris and holder of a Master of Law, Aldo Cardoso began his career in 1979 at Arthur Andersen,
where he became a partner in 1989. Vice-President Auditing and Consulting Europe in 1996, then Chairman of Andersen France from 1998
to 2002, he was appointed Chairman of the Supervisory Board of Andersen Worldwide from 2000 to 2002, before becoming Chairman of the
Managing Board from 2002 to 2003. In that capacity, Aldo Cardoso managed the shutdown of Andersen’s activities worldwide.
List of activities and other responsibilities in 2010:
RESPONSIBILITIES: ● Director: Mobistar (Belgium); Bureau Veritas, GDF Suez, Gecina, Imerys, Rhodia (France).
● Censor: Axa Investment Managers (France).
List of activities and other responsibilities that expired during the last five years:
● Director: Accor, Orange (France).
Jacques DRIJARD
Director
Born on March 29, 1943
Work address: PGB S.A.1, Rond-Point des Champs-Elysées – 75008 Paris (France)
A Civil Engineering graduate of Ecole Nationale Supérieure des Mines, Paris, Jacques Drijard began his career in 1966 at DBA Group Bendix
Corp, before joining Le Nickel Penarroya Mokta group in 1970. He joined Imetal (later renamed Imerys) in 1974 and in 1988 became Chief
Financial Officer and Member of the Executive Committee until 1996. Since January 2010, Jacques Drijard is Chief Executive Officer of Pargesa
Holding S.A., he previously was the Deputy Chief Executive Officer since 1997.
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Board of Directors
List of activities and other responsibilities in 2010:
MAIN ACTIVITY: ● Chief Executive Officer: Pargesa Holding S.A. (Holding company - Switzerland).
OTHER RESPONSIBILITIES: ● Chairman & Chief Executive Officer: PGB S.A. (France).
● Chairman of the Board of Directors: Société Française Percier Gestion “SFPG” (France).
● Delegate Director: Pargesa Compagnie S.A. (Switzerland).
● Director: Imerys (France); Pargesa Netherlands B.V. (Netherlands).
List of activities and other responsibilities that expired during the last five years:
● Deputy Chief Executive: Pargesa Holding S.A. (Suisse).
Ian GALLIENNE
Director
Born on January 23, 1971
Work address: Ergon Capital Partners - 24, Avenue Marnix - 1000 Bruxelles (Belgium)
A Management and Administration graduate with a specialization in Finance at E.S.D.E. Paris and holder of an MBA from INSEAD, Fontainebleau,
Ian Gallienne began his career in Spain in 1992 as co-founder of a commercial company. From 1995 to 1997, he was a member of the
management of a consulting firm specialized in the reorganization of ailing companies in France. From 1998 to 2005, he was Manager of the
private equity fund, Rhône Capital LLC, in New York and London. Since 2005, he has been co-founder and Managing Director of the private
equity funds Ergon Capital Partners, Ergon Capital Partners II and Ergon Capital Partners III (Belgium).
List of activities and other responsibilities in 2010:
MAIN ACTIVITIES: ● Managing Director: Ergon Capital Partners, Ergon Capital Partners II, Ergon Capital Partners III (Private equity funds
- Belgium).
● Director: Ergon Capital SA (Belgium).
● Manager: Ergon Capital II Sàrl (Luxembourg).
OTHER RESPONSIBILITIES: ● Director: Groupe Bruxelles Lambert, Steel Partners NV (Belgium); Central Parc Villepinte SA, Elitech Group SAS,
Fonds de Dotation du Palais, Imerys, PLU Holding SAS (France); Gruppo Banca Leonardo SpA, Seves SpA (Italia);
Arno Glass SA (Luxembourg).
● Manager: Egerton Sàrl (Luxembourg).
List of activities and other responsibilities that expired during the last five years:
● Director: Ergon Capital SA, Fapakt SA, King Belgium, King Benelux Holding BV (Belgium); Farmabios SpA, Nicotra
Gebhardt SpA, Stroili Oro SpA (Italia); King Nederland (Netherlands).
Fatine LAYT
Director
Born on July 10, 1967
Work address : Oddo & Cie – 12, boulevard de la Madeleine - 75009 Paris (France)
A graduate of Institut d’Etudes Politiques Paris and Société Française des Analystes Financiers (SFAF), Fatine Layt joined the Euris group on
its creation in 1989; she held various positions there until 1992, when she was appointed Chief Executive Officer of EPA and director of Glénat
and Actes Sud; she also managed two audiovisual companies created in partnership with Canal +. In 1993, she became Chief Financial Officer
of the investment fund Oros then Chief Executive Officer of Sygma Presse in 1995. From 1996 to 1998, Fatine Layt was Chairman & CEO of
the specialized press group CEPP and director of the trade press federation. In 2000, she created Intermezzo, a company specialized in the
media sector before becoming a partner in Messier Partners, a merchant bank based in Paris and New York, in 2003. In 2007, she founded
Partanéa, a merchant bank transferred in late 2008 to the Oddo et Cie group, of which she became an Executive Committee member; she is
also managing partner and Chairman of Oddo Corporate Finance.
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List of activities and other responsibilities in 2010:
MAIN ACTIVITY: ● Managing partner and Chairman: Oddo Corporate Finance (Merchant bank - France).
OTHER RESPONSIBILITIES: ● Chief Executive Officer: A&A Associés SAS, Partanea SAS (France).
● Manager: Intermezzo (France).
● Director: Fondation Renault (France).
● Member of the Supervisory Board: Institut Aspen France (France).
● Member of the Executive Committee: Oddo & Cie (France).
● Chairman: Le Cercle des Partenaires des Bouffes du Nord (France).
List of activities and other responsibilities that expired during the last five years:
● Director: Messier Partners, Inc. (United States); Messier Partners SAS (France).
Jocelyn LEFEBVRE
Director
Born on December 22, 1957
Work address: Power Corporation du Canada - 751, Square Victoria - Montréal (Québec) - Canada H2Y 2J3
A business administration graduate of Hautes Etudes Commerciales (HEC) Montréal and a member of the Quebec order of chartered accountants,
Jocelyn Lefebvre began his career in 1980 at Arthur Andersen & Co. in Montreal, Brussels and Paris. In 1986, he joined Société Générale de
Financement du Québec and the Canadian industrial group M.I.L. Inc., where he was successively Assistant Chairman, Vice-Chairman for
administration and special projects then for corporate affairs while holding the position of Chairman of one of its main subsidiaries (Vickers
Inc.) until 1991. In 1992, Jocelyn Lefebvre joined the Power Corporation du Canada group, where he has held various positions in Europe.
List of activities and other responsibilities in 2010:
MAIN ACTIVITY: ● Director: Power Corporation du Canada (Holding company – Canada).
OTHER RESPONSIBILITIES: ● Chief Executive Officer: Sagard S.A.S. (France).
● Member of the Managing Board: Parjointco N.V., Power Financial Europe B.V. (Netherlands).
● Director: Imerys (France).
List of activities and other responsibilities that expired during the last five years:
● Director: Suez-Tractebel S.A. (Belgium).
Eric LE MOYNE DE SÉRIGNY
Director
Born on April 7, 1946
Work address: Alternative Leaders France - 43, avenue Marceau - 75116 Paris (France)
With a postgraduate degree in law from the Paris law faculty, Eric Le Moyne de Sérigny began his career in 1968 at Banque Rothschild, where
for 15 years he held various management positions before joining Chase Manhattan Bank as Director and Vice-President in 1984. In 1988, he
joined Lloyds Bank S.A. where he was successively Chief Executive Officer then Chairman & Chief Executive Officer until 2002. Since 2003,
Eric Le Moyne de Sérigny has been Chairman of the Managing Board of Alternative Leaders France S.A.
List of activities and other responsibilities in 2010:
MAIN ACTIVITY: ● Chairman of the Managing Board: Alternative Leaders France S.A. (Portfolio management company – France).
● Senior Advisor: KBL Richelieu (Bank - France).
● Senior Partner: Athema (Financial investment services – France).
OTHER RESPONSIBILITIES: ● Director: Imerys (France).
List of activities and other responsibilities that expired during the last five years:
● Director: Istac S.A., Richelieu Finance (France).
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Maximilien de LIMBURG STIRUM
Director
Born of April 29, 1971
Work address: Compagnie Nationale à Portefeuille - 12, rue de la Blanche Borne - 6280 Loverval (Belgium)
A graduate of Ecole de Commerce Solvay of the Université Libre de Bruxelles, Maximilien de Limburg Stirum began his career in 1995 with
Compagnie Nationale à Portefeuille, where he has been Vice President Investments and Member of the Executive Management since 2003.
List of activities and other responsibilities in 2010:
MAIN ACTIVITY: ● Vice President investments and Member of the Executive Management of Compagnie Nationale à Portefeuille
(Holding company – Belgium).
OTHER RESPONSIBILITIES: ● Director-Chairman: Distriplus (Belgium).
● Director: Carpar, Corné Port Royal Chocolatier, Distripar, Fibelpar, Fidentia Real Estate Investments, Fingen,
Finimpress, GB-INNO-BM, Goinvest, Groupe Jean Dupuis, Investor, SolvayAlumni, Trasys Group (Belgium); Entremont
Alliance, Financière Flo, Groupe Flo, Imerys, Tikehau Capital Advisors, Unifem (France); Erbe Finance, Kermadec
(Luxembourg); Pargesa Holding S.A. (Switzerland).
● Commissaris: Agesca Nederland (Netherlands).
● Permanent representative of Compagnie Immobilière de Roumont (Belgium) on the Board of Directors of: Belgian
Icecream Group “BIG” Belgian Sky Shops, GIB Corporate Services, Starco Tielen (Belgium).
List of activities and other responsibilities that expired during the last five years:
● Director: Centre de Coordination de Charleroi, MESA (Molignée Energie), Quick Restaurants (Belgium); Lyparis
(France); Swifin (Luxembourg).
● Permanent representative of Fibelpar (Belgium) on the Board of Directors of: Château Rieussec (France).
Gilles MICHEL
Director and Deputy Chief Executive Officer
Born on January 10, 1956
Work address: Imerys - 154, rue de l’Université - 75007 Paris (France)
A graduate of Ecole Polytechnique, Ecole Nationale de la Statistique et de la l’Administration Economique (ENSAE) and Institut d’Etudes
Politiques (IEP) of Paris, Gilles Michel spent four years within the World Bank (Washington, D.C.) before joining the Saint-Gobain group in
1986 where during sixteen years he held various managerial positions, notably in the United States, before being appointed in 2000 General
Manager of the Ceramics & Plastics business group and member of Saint-Gobain’s Management Committee. In 2001, he joined PSA Peugeot-
Citroën group, as Manager of the Platforms, Techniques & Purchasing activity and member of Peugeot’s Executive Committee. In 2007, he
was appointed General Manager of Citroën, and member of managing Board of Peugeot SA. On the 1st of December 2008, Gilles Michel held
the position of Chief Executive Officer of the Strategic Investment Fund, whose activity involves taking equity stakes in companies expected
to contribute to the growth and competitiveness of the French economy. Gilles Michel joined Imerys in September 2010. Since November 3,
2010, he has been Director and Deputy Chief Executive Officer; since January 2011, he also holds the operational responsibility of the Group.
List of activities and other responsibilities in 2010:
MAIN ACTIVITY: ● Director and Deputy Chief Executive Officer: Imerys.
OTHER RESPONSIBILITIES: ● None.
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List of activities and other responsibilities that expired during the last five years:
● Chief Executive Officer: Fonds Stratégique d’Investissement (France).
● Chairman: Citer (France).
● Member of the Managing Board: Peugeot SA (France).
● Chairman of the Board of Directors: Citroën Belux (Belgium); Citroën Danemark A/S (Denmark); Citroën UK Ltd (Great
Britain); Citroën Italia (Italia); Citroën (Switzerland) SA.
● Chairman of the Supervisory Board: Citroën Nederland BV (Netherlands).
● Vice-Chairman and member of the Supervisory Board: Citroën Deustchland AG (Germany).
● Managing Director: PCMA Holding BV (Netherlands).
● Director: Automoviles Citroën España, Autotransporte Turistico Español SA (Spain); France Telecom (France);
Automoveis Citroën, Comercial Citroën SA (Portugal); Citroën Sverige AB (Sweden).
● Permanent representative of Automobiles Citroën: Director of Banque PSA Finance, Gefco (France); Chairman of
the Board of Directors of Automoveis Citroën (Portugal).
Jean MONVILLE
Director
Born on November 7, 1944
Work address: SPIE SA - Parc Saint Christophe - 95863 Cergy-Pontoise Cedex (France)
A graduate of Ecole Polytechnique, Paris and holder of an Economic Science degree, Jean Monville began his career in 1969 at the Financial
Department of Société Générale, in charge of the building and public works sector and concession projects. In 1974, he joined Isochem, a
company specializing in chemistry and chemical engineering. In 1978, he joined the Spie Batignolles group as Vice President export finance.
From 1984 to 1992, he was deputy CEO then CEO of Spie Capag, a subsidiary specializing in oil projects. In 1992, he became Vice President
marketing of the Spie Batignolles group, before being appointed Director and CEO in 1995. From 1997 to end of 2009, Jean Monville was
Chairman of the Spie Batignolles group, which became AMEC Spie then, in 2006, Spie SA.
List of activities and other responsibilities in 2010:
MAIN ACTIVITY: ● Director and Honorary Chairman: Spie SA (Electric engineering group – France).
OTHER RESPONSIBILITIES: ● Chairman of the Board of Directors: Spie 4 (France).
● Manager: Spie Management (France).
● Permanent representative of Spie Management: Chairman of Euro Spie, Spie 12, Spie CDF, Spie OPS (France).
● Member of the Supervisory Board: La Financière Atalian (France).
● Director: Imerys, SBTP, Spie International (France).
● Chairman: MEDEF Committee “Déontologie internationale et principes directeurs”.
List of activities and other responsibilities that expired during the last five years:
● Chairman of the Board of Directors: Financière Spie, Spie SA (France).
● Director: Spie International, Spie Rail (France).
● Vice-Chairman: Fédération Nationale des Travaux Publics (FNTP), Groupement des Industries de l’équipement
électrique, du contrôle commande et des services associés (GIMELEC) (France).
● Chairman: MEDEF Committee “Internationalisation de l’Entreprise”.
Robert PEUGEOT
Director
Born on April 25, 1950
Work address: PSA Peugeot Citroën - 75, avenue de la Grande Armée - 75116 Paris (France)
A graduate of Ecole Centrale de Paris engineering school and holder of an MBA from INSEAD, Fontainebleau (France), Robert Peugeot
began his career in 1975 with Peugeot, where he held several positions both in France and abroad. In 1985 he joined Citroën becoming Vice
President Quality and Organization from 1993 to 1998, when he was appointed Vice President Innovation & Quality of PSA Peugeot Citroën
and Member of the Executive Committee, before being appointed in February 2007, Member of the Supervisory Board of Peugeot S.A. and
Member of the Strategic Committee and the Audit Committee of PSA Peugeot Citroën group. Since 2002, he has been Chairman & Chief
Executive Officer of FFP.
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List of activities and other responsibilities in 2010:
MAIN ACTIVITIES: ● Chairman and Chief Executive Officer: F.F.P. (Société Foncière, Financière et de Participations – Real estate, financial
and holding company - France).
● Member of the Supervisory Board: Peugeot S.A. (Automotive manufacturer - France); IDI Emerging Markets SA
(Luxembourg).
● Member of the Strategic Committee and Audit Committee: PSA Peugeot Citroën group.
OTHER RESPONSIBILITIES: ● Chairman and Chief Executive Officer: Simante, SL (Spain).
● Member of the Supervisory Board: Hermès International (France).
● Director: Sofina SA (Belgium); Fomentos de Construcciones y Contratas, S.A. (Spain); E.P.F. (Établissements Peugeot
Frères), Faurecia, Holding Reinier, Imerys, Sanef (France); DKSH Holding AG (Switzerland).
● Manager: CHP Gestion SCI, Rodom SCI (France).
● Permanent representative of F.F.P. on the Supervisory Board of Zodiac Aérospace (France).
● Statutory representative of F.F.P.: Chairman of Financière Guiraud S.A.S. (France).
List of activities and other responsibilities that expired during the last five years:
● Member of the Supervisory Board: Citroën Deutschland AG (Deutschland); Aviva France (France).
● Director: Alpine Holding (Austria); Citroën Danemark AS (Denmark); B-1998, SL, FCC Construccion, S.A. (Spain); Aviva
Participations, GIE Recherches et Etudes PSA Renault, Immeubles et Participations de l’Est, L.F.P.F. (La Française
de Participations Financières) (France); Citroën UK Ltd, Waste Recycling Group Limited (Great Britain).
Olivier PIROTTE
Director
Born on September 18, 1966
Work address: Groupe Bruxelles Lambert – 24, Avenue Marnix - 1000 Bruxelles (Belgium)
An engineering graduate of Ecole de Commerce Solvay of the Université Libre de Bruxelles, Olivier Pirotte began his career in 1989 at Arthur
Andersen, where he held management positions for both the Business Consulting and Audit divisions. In 1995 he joined Groupe Bruxelles
Lambert where, since 2000, he has been Manager of Equity Interests and Investments.
List of activities and other responsibilities in 2010:
MAIN ACTIVITY: ● Manager of Equity Interests and Investments: Groupe Bruxelles Lambert (Holding company - Belgium).
OTHER RESPONSIBILITIES: ● Director and Member of the Strategic Committee and Audit Committee: Suez Environnement (France).
● Director and Chairman of Audit Committee: Electrabel S.A. (Belgium).
● Director: Brussels Securities S.A., GBL Treasury Center S.A., Ergon Capital Partners (Belgium); Belgian Securities
BV (Netherlands).
● Manager: GBL Energy S.à.r.l., GBL Verwaltung S.à.r.l. (Luxembourg).
● Member of the Investments Committee: Sagard Equity Partners (France).
List of activities and other responsibilities that expired during the last five years:
● Director: RTL TVI S.A., SN Airholding (Belgium).
Amaury de SÈZE
Director
Born on May 7, 1946
Work address: PGB S.A. - 1, Rond-Point des Champs-Élysées - 75008 Paris (France)
A graduate of Centre de Perfectionnement dans l’Administration des Affaires and Stanford Graduate School of Business (USA), Amaury de
Sèze began his career in 1968 at Bull General Electric. In 1978, he joined the Volvo group where he held various positions before becoming
the Chairman & CEO of Volvo France in 1986, then Chairman of Volvo Europe and a member of the group’s Executive Committee in 1990. In
1993, he joined the Paribas group as a member of the Managing Board of Compagnie Financière de Paribas and Banque Paribas in charge of
holdings and industrial affairs. From 2002 to October 2007, he was Chairman of PAI Partners. In April 2008, he was appointed Vice-President
of Power Corporation du Canada, in charge of European investments.
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List of activities and other responsibilities in 2010:
MAIN ACTIVITY: ● Vice-President of the Board of Directors: Power Corporation du Canada (Holding company - Canada).
OTHER RESPONSIBILITIES: ● Chairman of the Board of Directors: Carrefour S.A. (France).
● Chairman of the Supervisory Board: PAI Partners – since July 2010 (France).
● Member of the Supervisory Board: Publicis Groupe SA (France).
● Director: BW Group, Erbe SA, Groupe Bruxelles Lambert (Belgium); Groupe Industriel Marcel Dassault S.A.S., Imerys,
Suez Environnement, Thales (France); Pargesa Holding SA (Switzerland).
List of activities and other responsibilities that expired during the last five years:
● Chairman: PAI Partners UK Ltd (Great Britain).
● Vice-Chairman of the Supervisory Board: Carrefour SA (France).
● Director: Gepeco SA (Belgium); Power Corporation du Canada (Canada); Eiffage, Novalis SAS, Novasaur SAS, Vivarte
SA (France); PAI Europe IV UK General Partner Ltd (Great Britain); PAI Europe III General Partner N.C., PAI Europe
IV General Partner N.C. (Guernesey); PAI Partners Srl, Saeco SpA (Italia).
● Member of the Supervisory Board: Gras Savoye SCA (France).
Pierre-Jean SIVIGNON
Director
Born on December 21, 1956
Address: Van Leyen Berghlaan, Résidence l’Etoile – 1082 GM Amsterdam (The Netherlands)
A graduate of the Ecole Supérieure des Sciences Economiques (ESSEC) Paris, Pierre-Jean Sivignon began his career in 1979 with the firm
Peat Marwick Mitchell. In 1982, he joined the Schlumberger group, where he held various positions in the Financial Department of the Dowell
Schlumberger Oilfield Services division (in Europe and Africa), then became General Manager of the Bank and Industry division (in Paris) and,
finally, Group Treasurer in Paris and New York. From 2001 to 2005, he was Chief Financial Officer of Faurecia. Pierre-Jean Sivignon joined the
Philips group on May 1, 2005, where he held the positions of Chief Financial Officer and member of the Executive Committee until March 31, 2011.
List of activities and other responsibilities in 2010:
MAIN ACTIVITY: ● Chief Financial Officer and Member of the Executive Committee: Royal Philips Electronics (Electronic equipment
manufacturer – Netherlands).
OTHER RESPONSIBILITIES: ● None.
List of activities and other responsibilities that expired during the last five years:
● None.
Jacques VEYRAT
Director
Born on November 4, 1962
Work address: Louis Dreyfus SAS - 7, rue Képler - 75116 Paris (France)
A graduate of Ecole Polytechnique and Ecole des Ponts et Chaussées, Paris engineering schools, Jacques Veyrat began his career at the
French Treasury Department then held various positions on ministers’ staffs. In 1995, he joined the Louis Dreyfus group, where he held several
management positions, particularly with Louis Dreyfus Armateurs. From 1998 to 2005, Jacques Veyrat was Chairman & Chief Executive Officer
of Neuf Telecom before becoming Chairman & Chief Executive Officer of the Neuf Cegetel group (resulting from the merger of Neuf Telecom
and Cegetel) until April 2008 when he took over the management of Louis Dreyfus group.
List of activities and other responsibilities in 2010:
MAIN ACTIVITY: ● Chief Executive Officer: Louis Dreyfus SAS (Processing, trading and merchandizing of agricultural and energy
commodities – France).
OTHER RESPONSIBILITIES: ● Chief Executive Officer: Kurosawa BV (Netherlands).
● Director: Direct Energie, Neoen, HSBC France, Imerys (France).
● Member of the Supervisory Board: Eurazeo (France).
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List of activities and other responsibilities that expired during the last five years:
● Chairman and Chief Executive Officer: Neuf Telecom (France).
● Managing Director: Louis Dreyfus SAS, Louis Dreyfus Technologies (France).
● Director: Irise, SHD, Tajan (France).
● Member of the Supervisory Board: Altalir Amboise, Amboise Investissement, Jet Multimédia (France).
● Permanent representative of Neuf Telecom: Chief Executive Officer of Wengo, Director of LD Collectivités (France).
Responsibilities held by directors, members of the executive management, in listed companies outside the Group
With the exception of the directorship held in 2010 by Mr. Gilles
Michel at France Télécom, as representative of the French State,
no other Director, member of the Executive Management of the
Company, has held a directorship outside the Group in any stock
market-listed company in France or abroad during that year.
Management expertise and experience of the members of the Board of Directors
The criteria used to select Directors include their management
expertise and experience. The member Directors of the Audit
Committee are also chosen for their financial competence. The
Appointments and Compensation Committee pays particular
attention, together with the Board of Directors, to assessing these
criteria.
The activities and responsibilities of the Directors (see paragraph 3.1.3
of the present chapter) attest to their individual expertise and
experience in different areas such as finance, industry or services,
which contributes to the quality of Board’s work and to its correctly
balanced composition.
Family ties between the members of the Board of Directors
To the best of the Company’s knowledge, there are no family ties
between the members of the Board of Directors.
Potential conflicts of interest between the members of the Board of Directors
To the best of the Company’s knowledge, no potential conflicts
of interest exist between the duties of the Directors with respect
to the Company and their private interests and/or other duties.
It is specified that some Directors of the Company also have executive
responsibilities with the Company’s controlling shareholders (see
paragraph 3.1.3 of the present chapter).
No Director has been selected pursuant to any arrangement or
agreement entered into with the main shareholders, customers,
suppliers or other parties.
Service contracts between the Company and its Directors
To the best of the Company’s knowledge, there is no service
contract entered into by the Directors and the Company or any of
its subsidiaries providing for the granting of advantages upon expiry
of such contract.
No sentence for fraud
To the best of the Company’s knowledge, no sentence for fraud has
been pronounced against any member of the Board of Directors
during the past five years.
Bankruptcy, sequestration or liquidation of companies in which a Director has been involved as executive during the past five years
To the best of the Company’s knowledge, no Directors have been
involved as executives in any bankruptcy, receivership or liquidation
of any company in the past five years.
Incrimination of and/or public sanction of the law against a Director by statutory or regulatory authorities during the past five years
To the best of the Company’s knowledge, no official incrimination
and/or public sanction of the law has been pronounced against any
member of the Board of Directors in the past five years.
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3.1.4 FUNCTIONING
The Board of Directors meets as often as the interests of the Group
require and at least three times a year. It is convened by its Chairman
by any written means with at least five days’ notice, unless the
members of the Board unanimously decide otherwise.
2010
Number of meetings 5
Average actual attendance rate of members 82%
2011
Expected number of meetings 5
The provisional schedule of Board of Directors’ meetings for the
year to come is set, at the latest, in the last meeting of each year.
The Chairman of the Board of Directors usually sets the agenda of
each Board meeting after gathering the suggestions of the Chief
Executive Officer and the opinion of the Secretary of the Board.
He runs meetings, facilitates debates and reports on meetings
in accordance with the law, the by-laws of the Company and the
Corporate Governance principles and practices that the Board has
itself adopted, as set out in the following paragraph.
Notices of meeting are sent to every Director with the draft minutes
of the previous meeting, drawn up by the Secretary and approved
by the Chairman of the Board, and all information and documents
concerning the points on the agenda that are necessary for members’
effective participation in debates. Such information and documents
may also include, as the case may be, the Group’s quarterly, semi-
annual or annual (provisional or definitive) financial statements and
the presentation of the various business groups’ markets or any
other specific items to be raised. Certain additional documents may
also be handed to the Directors in meetings: for example, draft press
releases on the Group’s regular financial statements or information
on trends in the price of the Company’s shares.
In order to allow them to carry out their duties in appropriate
conditions, the Chairman and, on his request, the Chief Executive
Officer also send the Directors the following between Board
meetings: any important information published, including critical
items, concerning the Group (particularly in the form of press articles
and financial analysis reports) and, if sufficiently important or urgent,
any other relevant information on the Group’s situation, projects, and
economic or market environment.
The work done by each of the specialized Committees since the
previous meetings is regularly presented in a report to the Board
by its Chairman or, in his or her absence, another member of the
Committee in question.
The Secretary of the Board is the Group General Counsel. His
appointment and dismissal, as the case may be, are within the sole
competence of the Board. All the members of the Board may consult
the General Counsel and benefit from his services. He assists the
Board and makes any useful recommendations on the procedures
and rules that apply to its functioning, and on their implementation
and observance. The Secretary is empowered to certify copies or
extracts of minutes of Board meetings.
3.1.5 IMPLEMENTATION OF BEST CORPORATE GOVERNANCE PRACTICES
Internal charter of the Board of Directors
In the context of compliance with best Corporate Governance
practices, the Board has adopted an Internal Charter that contains
all the principles for its members’ conduct and the functioning of
the Board and its specialized Committees. The Charter, of which
the first version was adopted in 2002, is regularly updated in order
to incorporate: legal and regulatory developments that apply to the
Company; recommendations on Corporate Governance by AMF as
well as trade and associations bodies that represent French stock
market-listed companies (AFEP, MEDEF, ANSA, etc.); and, finally, the
amendments made by the Board following the annual assessments
of its own functioning carried out to comply with best practices.
Each Director of the Company is given a copy of the “Directors’ Vade-
Mecum”, a collection of the main texts and provisions governing their
duties and obligations, including the Company’s by-laws, the Internal
Charter of the Board of Directors, the Procedure for the prevention
of use or disclosure of insider information within the Group and other
useful documents and forms enabling the Directors to comply with
their obligations.
The latest version of the Internal Charter of the Board of Directors is
available on the Group’s website (www.imerys.com), in the section
“Our Group/Corporate Governance.”
Self-assessment by the Board of Directors
In accordance with the Internal Charter, “every year the Board of
Directors reviews and appraises its working methods and activity
during the previous financial year. The findings of that examination are
intended to appear in the Board’s report in the Group’s Registration
Document. In addition, at intervals determined by its Chairman,
the Board of Directors conducts a formal self-assessment using a
questionnaire sent to the Directors beforehand.”
In order to comply with best practices, the Board of Directors
assesses its functioning and that of its Committees formally on an
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annual basis. Accordingly, each of its members was given earlier this
year an individual questionnaire on the role and performance of the
Board and its Committees, their composition and functioning, the
organization and holding of their meetings and, finally, the information
provided to Directors. The conclusions of the assessment were
presented and discussed at the Board of Directors’ meeting on
February 15, 2011.
Generally speaking, the workings of the Board and its Committees
were judged quite satisfactory by their members. The Directors
particularly appreciate the quality of the information provided at each
of their meetings and the quality and efficiency of debates among the
Board and its Committees. The Directors were satisfied to note that
the main recommendations arising from the Board’s self-assessment
in February 2010, intended to improve its workings and performance
and those of its Committees, had been applied. In particular, they
welcomed the appointment of the first woman member of the Board,
Mrs. Fatine Layt, and the proposal at the next Shareholders’ General
Meeting to appoint Mrs. Arielle Malard de Rothschild, which would
raise the proportion of women on the Board to almost 12%. The
Directors were also able to acknowledge the progress made by the
Group in 2010 on Sustainable Development.
In order to improve its efficiency and that of its Committees further,
the Board also judged it would be useful in the future to retain and
implement the following suggestions made by its members at the
time of that assessment:
p continue promoting the appointment of women as future Board
members, with a view to comply with the provisions of the recent
French law intended to ensure more balanced representation of
women and men on the boards of directors of stock market-listed
companies (20% proportion of women to be reached in 2014);
p appoint a Lead Director as Vice-Chairman of the Board in view
of the future merger of the functions of Chairman and Chief
Executive Officer. The Lead Director would assist the Chairman
in organizing the work of the Board and its Committees and in the
Company’s relations with its controlling shareholder groups, while
making sure that best practices are applied in terms of Corporate
Governance. He would chair the Strategic Committee and the
Appointments and Compensation Committee;
p appoint an ethics officer, the Group General Counsel and
Secretary of the Board, who would be tasked in particular with
providing, upon request from any concerned party, an opinion
prior to any transactions under consideration by executives on
the Company’s securities;
p encourage, for interested Directors, periodical tours of Group’s
key sites in order to better grasp its activities.
Furthermore, the Board decided, given the higher number of Directors
and the new governance structure under consideration, to review
the attendance fee scale at its next meeting. It also recommended
examining the relevance of extending the current duration of negative
window periods (see section 3.7 of the present chapter) as well as the
conditions, if any, for the Group’s executives to use trading mandates
for carrying out their transactions in the Company’s securities.
Finally, the Board judged that the terms of its Charter, including in
particular the recommendations resulting from the AFEP-MEDEF
Corporate Governance Code, still complied with the best Corporate
Governance practices of French stock market-listed companies.
However, as some adjustments has become necessary as a result
of the changes in governance structure under consideration and in
order to have it reflect the decisions that the Board had just made,
it was decided that an updated version would be drawn up and
handed to every Director of the Company at the next Board meeting.
❚ SPECIALIZED COMMITTEES
On May 3, 2005, the date on which the Company’s management
structure was changed to a Board of Directors, the Board confirmed
the usefulness of the three specialized Committees previously formed
by the Supervisory Board, which carry out their activities under the
responsibility of the Board and for which the Board defines the
missions, composition and compensation.
The members of the specialized Committees are chosen from
among the members of the Board. The Chief Executive Officer and,
as the case may be, any Delegate Chief Executive Officers, that are
also Directors of the Company, may not be members of any of the
Committees. The term of the duties of Committee members is the
same as their term of office as Director.
The specialized Committees only have an advisory role and do not
have any power of decision.
Each Committee determines the internal rules that apply to the
performance of its work.
The Committees’ meetings give rise to minutes. These are provided
to the members of the Committee concerned and, on request to the
Chairman of the Committee, to the other members of the Board of
Directors. The Chairman of the Committee concerned, or a member
of the Committee appointed for that purpose, reports to the Board
of Directors on the work of the Committee.
Furthermore, each of the Committees reviews its activity and
assesses its composition and its functioning during the previous
year; the results of such review and assessment are intended to
appear in the Group’s Registration Document.
❚ STRATEGIC COMMITTEE
(created on June 17, 1993 with the name Standing Committee)
Mission
The Internal Charter of the Board of Directors defines the Committee’s
missions as follows:
“The mission of the Strategic Committee is, in particular, to
examine and provide the Board of Directors with its opinions and
recommendations in the following areas:
1. Strategy
p drafting and setting orientations for the Group’s industrial,
commercial and financial strategy;
90 2010 REGISTRATION DOCUMENT IMERYS
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p ensuring that the strategy implemented by the Executive
Management complies with the orientations set by the Board
of Directors.
For that purpose, it examines in depth and, as the case may be,
makes recommendations to the Board on:
p the Group budget drawn up by the Executive Management; and
p all the major Group projects that:
• are likely to modify its financial structure or consolidation
structure,
• concern investment or divestiture transactions, or
• relate to the conclusion or carrying out of commercial or
industrial agreements that bind the future of the Group.
The above-mentioned projects are considered as “major” if their
implementation by the Executive Management requires the prior
approval of the Board of Directors (see paragraph 3.1.1 of the present
chapter) or those, because they are greater than the €20 million
threshold set by the Board, must be brought to the prior knowledge
of the Committee.
Every year, the Committee presents to the Board its expected
schedule for the examination of major strategic issues for the future
of the Group for the current year.
2. Risks
p questions relating to the identification, measurement and
monitoring by the Executive Management of the main possible
risks for the Group in the following areas:
• external environment: investor relations, the Group’s market
positions,
• internal processes: management of financial resources, human
resources potential, new product development, potential of
mineral reserves and resources, dependence and continuity of
key industrial or commercial activities, pricing policy,
• management information: financial control and reporting,
control of investment projects after completion.”
Composition
The Strategic Committee is made up of the following nine members, which must include the Chairman of the Board of Directors, who is also
Chairman of the Committee:
Name Date of 1st appointment to the Committee Independent member status
Aimery LANGLOIS-MEURINNE, Chairman June 17, 1993 No
Jacques DRIJARD, Vice-Chairman March 26, 1998 No
Aldo CARDOSO May 2, 2007 Yes
Ian GALLIENNE April 29, 2010 No
Jocelyn LEFEBVRE March 27, 1996 No
Eric LE MOYNE de SÉRIGNY July 26, 2004 No
Jean MONVILLE February 12, 2009 Yes
Olivier PIROTTE * April 29, 2010 No
Amaury de SÈZE July 30, 2008 No
Number of Members: 9 2
* Mr. Olivier Pirotte was appointed in succession of Mr. Thierry de Rudder.
Functioning
The Committee debates with the majority of its members present
and meets as often as its Chairman sees fit or at the request of the
Executive Management. In principle, it dedicates one meeting per
year to the Group’s strategy and market environment, to which all
the Directors are invited.
2010
Number of meetings 7
Average actual attendance rate of members 86%
2011
Expected number of meetings 7
To carry out its mission, the Committee hears the Chief Executive
Officer, the Delegate Chief Executive Officers, the Chief Financial
Officer, the Strategy & Development Manager and, on the initiative
of the Chief Executive Officer or at the Committee’s request to the
Chief Executive Officer, depending on the items on the agenda for
the Committee meeting, the relevant corporate department or line
managers. The Committee may also make visits or hear any of the
Group’s line managers, as it judges useful for the performance of
its mission.
The Secretary of the Committee is the Group’s Strategy &
Development Manager, who drafts the minutes of its meetings.
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Board of Directors
Activity in 2010
Throughout the year, the Strategic Committee monitored the
management and development actions carried out by the Executive
Management, making sure they conformed to the Imerys strategy
as set by the Board of Directors. The Committee welcomed the
sustainable effects resulting from the savings efforts made by the
Group in 2009 and the upturn of its markets in 2010.
As part of the periodical update of the Group’s five-year plan and
in order to examine in depth the prospects and available options,
the Committee reviewed the strategic plan of each Group’s division
for the 2010-2014 period. The Committee also reviewed the main
risks the Group is exposed to and which come more particularly
within its competence (such as energy costs or exchange rates).
On this occasion, the Strategic Committee was also informed of the
initiatives implemented by the Human Resources Department with
a view to strengthening the Group’s capacity to generate its future
management. The Committee then reported on the results of its
analysis to the Board.
The Strategic Committee also reviewed periodically and approved
the key steps and main aspects of the major external growth projects.
This review focused in 2010 on:
p the acquisition of 86.2% of the Brazilian company, Pará Pigmentos
SA (PPSA), specialized in the extraction and processing of kaolin
for paper and packaging. This acquisition was finalized in July
2010; the Group’s stake was increased to 100% at the end of
December 2010;
p the “Clay Vision” project (reconversion of the Group’s former
industrial sites in Cornwall through a joint venture with the
international group Orascom Holding AG, specialized in similar
long-term real estate projects), which was also finalized during
the 2010 financial.
Furthermore and as usual, the Strategic Committee thoroughly
analyzed the Group’s financial structure to make sure of its strength.
The Committee was consulted on this occasion on the Company’s
general financing strategy, on the aspects of currency and interest
rate hedging as well as on securing the diversified long-term financial
resources.
Finally, the Strategic Committee reviewed, at its last session of the
year, the Group’s 2011 budget, supported by a detailed presentation
of the budget of each of the Group’s four business groups by their
respective managers.
❚ APPOINTMENTS AND COMPENSATION COMMITTEE
(created on November 3, 1987 with the name Special Options
Committee)
Mission
The Internal Charter of the Board of Directors defines the Committee’s
missions as follows:
“The Appointments and Compensation Committee’s mission is to
examine and provide the Board of Directors with its opinions and
any recommendations in the following areas:
1. Appointments
p the selection of candidates for Director positions and appointment
proposals of the Chairman of the Board of Directors, the Chief
Executive Officer and, as the case may be, Delegate Chief
Executive Officers and Committee Chairmen. For that purpose,
the Appointments and Compensation Committee must take all
the following items into account: desirable balance of the Board’s
composition with regard to the make-up and evolution of the
Company’s shareholding, proportion of men and women on
the Board, finding and appraising possible candidates, and the
suitability of renewing terms of office;
p the presentation of a succession plan for Executive Corporate
Officers in the event of unforeseeable vacancies;
p the independent status of each of its members according to the
definition of “independence” adopted by the Board of Directors,
and any changes (or explanation of criteria) to be made to that
definition.
2. Compensation
p the amount and allotment of attendance fees (fixed and variable
parts) for the Directors;
p the general compensation policy for the Group’s executives;
p the individual compensation of the Chief Executive Officer and,
as the case may be, Delegate Chief Executive Officers and their
ancillary income (such as pension and healthcare plans or fringe
benefits), as well as on any other provisions relating to their status
and/or employment contract;
p the general policy for granting stock options or free shares of the
Company and fixing the beneficiaries of the options or free shares
plans proposed by the Chief Executive Officer;
p the fixing of individual stock options or free shares allotments for
the Executive Corporate Officers as well as the specific terms
and restrictions applicable thereto (achievement of economic
performance goals, limitation of numbers of rights allotted,
holding and keeping rules of Imerys shares,…) in accordance with
the recommendations resulting from the AFEP-MEDEF Corporate
Governance Code;
p the Group’s employee shareholder policy and the terms of its
implementation as proposed by the Executive Management.”
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Composition
The Appointments and Compensation Committee is composed of the following three members, which must include the Chairman of the Board
of Directors who is also Chairman of the Committee:
Name Date of 1st appointment to the Committee Independent member status
Aimery LANGLOIS-MEURINNE, Chairman November 3, 1987 No
Robert PEUGEOT May 3, 2005 Yes
Jacques VEYRAT February 14, 2007 Yes
Number of Members: 3 2
The composition of the Committee comply with the proportion of
2/3 independent members recommended by the AFEP-MEDEF
Corporate Governance Code.
Functioning
The Committee debates with at least two of its members present
and meets as often as its Chairman sees fit or on the request of the
Chief Executive Officer.
2010
Number of meetings 4
Average actual attendance rate of members 100%
2011
Expected number of meetings 2
To carry out its mission, the Committee hears the Chief Executive
Officer and the Group Vice-President Human Resources; it also has
recourse to independent experts.
The Secretary of the Committee is the Group Vice-President Human
Resources, who draws up the minutes of its meetings.
Activity in 2010
The Appointments and Compensation Committee was first
consulted in its first two meetings on the composition of the Board
of Directors and its Committees, particularly with respect to the
directors’ terms of office that expire following the next Shareholders’
General Meeting and proposed applications. On that occasion, the
Committee examined the situation of each of the members of the
Board in relation to the definition of “independence” adopted by the
Board at its May 3, 2005 meeting. The Committee checked that
the compositions of the Audit Committee and the Appointments
and Compensation Committee complied with the 2/3 proportion
of independent members in accordance with the AFEP-MEDEF
Corporate Governance Code.
In 2010, the Committee prepared the succession plan of Gérard
Buffière, Chief Executive Officer, which led it to recommend to
the Board the appointment of Gilles Michel first as Deputy Chief
Executive Officer and then as Chairman and Chief Executive Officer
as from April 28, 2011.
The Appointments & Compensation Committee also assessed the
2009 performance of Gérard Buffière, Chief Executive Officer, and
Jérôme Pecresse, Chief Operating Officer. In that respect, it reviewed
the amount of the variable part of their individual compensation owed
in relation to financial 2009 and payable in 2010, according to the
goals, particularly financial ones, that they had been given. It also
made recommendations on the setting of quantitative and qualitative
goals for the Chief Executive Officer and Chief Operating Officer
in order to determine the variable share of their compensation for
2010; the Committee also examined the compensation components
of Gilles Michel who was appointed Deputy Chief Executive Officer
on November 3, 2010 (for further details, see paragraph 3.3.2 of the
present chapter).
Furthermore, the Appointments and Compensation Committee
examined and made recommendations on the individual retention
program of the Executive Corporate Officers as well as on the general
program applicable to the other key managers of the Group.
Finally, the Committee undertook an in-depth examination of the
recommendations resulting from the AFEP-MEDEF Corporate
Governance Code in terms of compensation for corporate officers,
to which the Company declared its intention to refer on December 18,
2008. It thus observed that Imerys complied with the vast majority of
those recommendations. Moreover, it gave its opinion to the Board
as to the restrictive holding and keeping rules of Imerys shares by
the Executive Corporate Officers with respect to the grants of stock
options and performance shares.
❚ AUDIT COMMITTEE
(created on March 27, 1996)
Mission
The Internal Charter of the Board of Directors defines the Committee’s
missions as follows:
“The Audit Committee’s mission is to examine and give the Board
of Directors its opinion and any recommendations on the following:
1. Financial Statements
p the Company and consolidated annual financial statements to be
drawn up by the Board of Directors, together with a note from the
Group’s Chief Financial Officer, and the estimated and definitive
half-yearly consolidated financial statements;
p the scope of consolidation;
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Board of Directors
p the relevance and consistency of accounting methods, by
verifying, in particular, the reliability of internal information-
gathering and information-control procedures, with the aim of
ensuring that financial statements are fairly presented and that
they give an accurate image of the financial situation of the
Company and the Group;
p the method and estimates used for the impairment tests carried
out by the Group;
p the Group’s debt position, including structure and interest and
currency rate hedging policy and its outcome;
p significant off-balance sheet disputes and commitments, and their
impact on the Group’s accounts;
p the production and dissemination process for accounting
and financial information, ensuring that it complies with legal
requirements, regulatory authorities’ recommendations and
internal procedures.
2. Financial information
p the policy and applicable procedures for financial information
intended to ensure the Group’s compliance with its regulatory
obligations;
p the main financial communication items relating to the Group and
Company financial statements, in particular:
• concordance between those financial statements and reports
on them in financial communications,
• relevance of items used in that communication.
3. External control
p the proposals to appoint or renew the Statutory Auditors. It
examines and approves the contents of the requirements, the
schedule and the organization for the invitation to bid, with a
view to the appointment and, as the case may be, renewal of the
Statutory Auditors, and checks that the invitation to bid proceeds
correctly;
p the Statutory Auditors’ work program and any additional
assignments that they or other members of their network may be
given, as well as the amount of the corresponding compensation;
p the supervision of the rules for the use of the Statutory Auditors
for work other than auditing the financial statements and, more
generally, compliance with the principles guaranteeing the
independence of the Statutory Auditors;
p the conclusions of diligence work by Statutory Auditors as well
as their recommendations and follow-up actions.
4. Audit & Internal control
p the annual internal audit and internal control assessment
programs and the resources for their implementation;
p the results of the work of the internal and external auditors and
internal control function, the monitoring of any recommendations
they make, particularly in regard to the analysis and control of
significant risks and off-balance sheet commitments, as well as
the organization of the internal audit teams;
p the drafting and content of the Annual Report of the Chairman of
the Board of Directors on the Group’s internal control.
5. Risks
p the identification, measurement and monitoring by the Executive
Management of the possible major risks for the Group in the
following areas:
• external environment: legal or regulatory developments, crisis
management or occurrence of disasters,
• the internal processes: legal monitoring of major litigation and
compliance with existing regulations (particularly Environment,
Health & Safety and Sustainable Development), codes of
conduct and ethics;
p the orientations and implementation by the Executive Management
of the Group’s general policy for Sustainable Development,
internal control and risk prevention (organization, policies and
procedures, systems, etc.) and insurance;
p the work programs and results of internal experts (auditors,
lawyers,…) and any external experts that may be called upon to
analyze, audit or measure the risks and the Group’s performance
in the above-mentioned areas;
p any other subject likely to have significant financial and accounting
impact for the Company or the Group.”
Composition
The Audit Committee is comprised of the following three members, non-executive directors, who are chosen for their financial competence
as described in their respective biography above. Its Chairman must be an independent Director.
Name Date of 1st appointment to the Committee Independent member status
Aldo CARDOSO, Chairman May 3, 2005 Yes
Jocelyn LEFEBVRE March 27, 1996 No
Jean MONVILLE May 2, 2007 Yes
Number of Members: 3 2
The composition of the Audit Committee comply with the proportion of 2/3 independent members recommended by the AFEP-MEDEF
Corporate Governance Code.
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Functioning
The Committee debates with the majority of its members present and
meets as often as its Chairman sees fit and, to the extent possible, at
least two days before the Board of Directors draws up the definitive
annual and half-yearly consolidated financial statements. It may also
meet at the request of two of its members or of the Chairman of the
Board of Directors.
2010
Number of meetings 5
Average actual attendance rate of members 93%
2011
Expected number of meetings 5
To carry out its mission, the Committee hears the Statutory Auditors
and the Chief Financial Officer of the Group and, on the latter’s
initiative or at the Committee’s request to him according to the items
on the agenda for the Committee’s meeting, other individuals who
take part in drawing up and controlling the financial statements
and in risk prevention or management (Finance & Strategy
Department, Internal Audit Department, Sustainable Development
and Environment, Health & Safety Department, Legal Department
and Internal Control Department).
The Committee has unrestricted access to all available information
on the Group. It may also make visits and hear any of the Group’s
line managers or the relevant managers responsible for corporate
or operating risks management. The Committee may also request
that any internal or external audit be carried out on any subject
that it judges within the scope of its mission. The Chairman of the
Committee informs the Board of Directors of any such audit.
The Secretary of the Committee is the Group’s Chief Financial Officer.
He draws up the minutes of Committee meetings, which are kept
available to the Statutory Auditors.
Activity in 2010
As in previous years, the Audit Committee conducted an in-depth
review of the corporate and consolidated financial statements for
2009 and for first-half 2010. It also examined the main items ahead
of the closure of the 2010 financial statements. As part of that work,
it particularly looked into the various income statement items such
as the composition of “Other income and expenses”, the balance
sheet and the statement of changes in financial position. On that
occasion, it also made sure, after hearing the Statutory Auditors, of
the relevance and consistency of the accounting methods used by
the Group. The Committee expressed its satisfaction with the quality
of the financial statements closing work and recommended that the
Board approve the statements unreservedly.
As usual, the Committee monitored the activity plan of the internal
audit and thus, each semester, reviewed the results of the achieved
missions. The Committee made sure of the coordination of internal
audit work with the tasks of the Statutory Auditors; finally the
Committee examined the measures taken by the Group to answer
to the observations resulting from the audit missions conducted over
the last two years.
Furthermore, at each Committee’s meeting, a detailed presentation
is made by the concerned managers on the accounting rules and
methods applied by the Group. On this occasion, the Committee
checks their compliance with the regulations in force as well as the
relevance of their application within the Company.
The Audit Committee also examined the Group’s results in terms
of Environment, Health & Safety and Sustainable Development,
in particular the results of the specific program for measuring
and improving of the Group’s energy and “carbon” efficiency. The
Committee welcomed the further reduction in CO2 emissions in
2009, as well as the further improvement in lost-time accidents
frequency rate. At the same time, the Committee examined the legal
environment relevant to the Group: CO2 emissions, quotas allocation,
European REACH regulation as well as their implementation costs
accounting methods.
Moreover, the Committee reviewed the main lawsuits or risks of
lawsuits for the Group as well as the related provisions; it examined
the Group’s insurance policy and the main coverage programs taken
out by the Group. Hence, the Committee observed the improvement
in the management of the Group’s loss history and the strengthening
of loss prevention actions.
The Audit Committee also reviewed the Group’s management policy
in terms of currency risk.
In addition to the detailed review of these different risks, the
Committee examined the mapping and the management of the
major risks to which the Group is exposed, as well as the action
plan to be implemented in 2010 in order to reduce their impact in
case of occurrence and thus to better manage them. The Committee
concluded that some of these actions had already been implemented
during the 2010 financial and expressed satisfaction with the
effectiveness of the Group’s risks and internal control management
mechanisms.
The Audit Committee also examined, from the point of view of
their accounting treatment, the “Clay Vision” Project related to the
real estate development project on sites that have become non-
operational in Cornwall as well as the project for factoring some
trade receivables, with the aim of giving the Group a new source
of financing.
Early in the year, the Committee also reviewed, before its adoption
by the Board of Directors, the draft report of the Chairman of the
Board on internal control for financial 2009 and, for that purpose,
heard the Statutory Auditors.
The examinations and reviews carried out by the Committee
in 2010 enabled it to inform the Board of its observations and
recommendations; they did not reveal any major cause for concern.
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Executive Management
3.2 | EXECUTIVE MANAGEMENT
3.2.1 POWERS
Pursuant to legal and statutory provisions, the Chief Executive
Officer and the Delegate Chief Executive Officers are vested with
the most extensive powers to act on behalf of the Company under
any circumstances. They exercise their powers within the limits of
the corporate purpose and subject to the powers expressly vested in
the Shareholders’ General Meeting and the Board of Directors; they
represent the Company with respect to third parties.
Pursuant to article 18 of the by-laws, the Board of Directors may limit
their powers. However, this limitation is void against third parties.
Paragraph 3.1.1 of the present chapter describes the internal
functioning arrangements for the Board of Directors and, in particular,
lists the operations that require the authorization of the Board of
Directors prior to their implementation by the Executive Management.
3.2.2 COMPOSITION
As of December 31, 2010, the Executive Management of the Company was composed of Gérard Buffière, Chief Executive Officer, assisted by
Gilles Michel (since November 3, 2010) as Deputy Chief Executive Officer and Jérôme Pecresse as Chief Operating Officer.
Name Age Nationality PositionDate of 1st
appointmentYear of renewal of term of office
Number of securities owned
Gérard BUFFIÈRE 66 French Director and Chief Executive Officer 05/03/2005 2011 78,886 shares
56.287 units
FCPE Imerys Actions*
Gilles MICHEL 54 French Director and Deputy Chief Executive Officer 11/03/2010 2011 100 shares
Jérôme PECRESSE 44 French Chief Operating Officer 02/13/2008 2011 816 shares
4.948 units
FCPE Imerys Actions*
* FCPE Imerys Actions, created under employee shareholder plans (see chapter 6, paragraph 6.2.5 of the Registration Document); the assets of these funds are
mainly invested in Imerys shares.
3.2.3 OTHER INFORMATION AND OFFICES OF THE MEMBERS OF THE EXECUTIVE MANAGEMENT AS OF DECEMBER 31, 2010
The other information on Gérard Buffière and Gilles Michel as well
as the offices they hold or have held in the past five years appear in
paragraph 3.1.3 of the present chapter.
Jérôme Pecresse has not held any office outside of the Imerys group
in the past five years.
A graduate of Ecole Polytechnique de Paris and Ponts & Chaussées
engineering school, Jérôme Pecresse began his career by holding
various responsibilities in London and Paris with the business bank
Credit Suisse First Boston (a subsidiary of the Credit Suisse group)
of which he managed the Mergers & Acquisitions activities for the
French market. He joined the Imerys Group in September 1998 as
Strategy and Development Manager and was appointed member
of Imerys’ Managing Board on July 25, 2002. On January 1, 2003,
he took over the Group’s Finance & Strategy Department until
April 2006, when he became Vice-President, Minerals for Ceramics,
Refractories, Abrasives & Foundry business group. On February 13,
2008, Jérôme Pecresse was appointed as Chief Operating Officer by
the Board of Directors, on the proposal of the Chief Executive Officer.
3.2.4 EXECUTIVE COMMITTEE
In 2005, the Chief Executive Officer decided, with the support of the Board of Directors, to set up an Executive Committee comprised of the
Group’s main line and support managers to assist him in the general management of the Group.
96 2010 REGISTRATION DOCUMENT IMERYS
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❚ MISSION
The Executive Committee, under the responsibility of the Executive
Management, is mainly in charge of:
p implementing the Group’s strategy and all the measures
determined by the Board of Directors;
p monitoring the operating activities of each business group and
ensuring, by defining any necessary corrective measures, that
they comply with their budgets and carry out the action plans
approved by the Executive Management;
p defining and monitoring the Group’s performance improvement
goals for the protection and safety of individuals in the workplace,
and defining any corrective measures;
p def ining Group-wide policies and actions (Sustainable
Development, including Environment, Health & Safety; Human
Resources; Internal Communication; Internal Control and
Risk Management; Innovation and Research & Technology;
Purchasing) and overseeing their rollout;
p fostering the sharing and dissemination of best practices in all
areas between the business groups; and,
p more generally, giving opinions and recommendations on
all projects, operations or measures that may be submitted
to it by the Executive Management, particularly with a view to
their subsequent presentation to the Board of Directors or its
specialized Committees.
3.3 | COMPENSATION
3.3.1 BOARD OF DIRECTORS
❚ AMOUNT
The maximum annual amount of attendance fees that may be allotted
to the members of the Board of Directors, as determined by the
Shareholders’ General Meeting of May 3, 2005, is €800,000.
Payments are made semi-annually in arrears. Consequently, the
gross amount of attendance fees effectively paid during a given
financial year include (i) the amount of fees with respect to the second
half of the previous year and (ii) the amount of fees with respect to
the first half of said year.
❚ COMPOSITION
As of December 31, 2010, the Executive Committee is comprised, in addition to the Chief Executive Officer and the Deputy Chief Executive
Officer, of the following 8 members:
Line managers Support managers
Jérôme Pecresse, Chief Operating Officer
(Minerals for Ceramics, Refractories, Abrasives & Foundry)
Michel Delville
(Finance)
Christian Schenck, Executive Vice-President
(Materials & Monolithics)
Denis Musson
(Legal & Corporate Support)
Olivier Hautin
(Pigments for Paper)
Thierry Salmona
(Innovation, Research & Technology & Business Support)
Daniel Moncino
(Perfomance & Filtration Minerals)
Bernard Vilain
(Human Resources)
❚ FUNCTIONING
The Executive Committee meets as often as the interests of the Group require or at the request of the Executive Management. It met 10 times
in 2010.
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Compensation
Pursuant to the provisions of article L. 225-102-1 of the French Code of Commerce, the gross individual amount paid to each of the Board
members in office in 2010 was as follows:
(euros) 2009 2010
A. LANGLOIS-MEURINNE, Chairman 214,000 208,500
G. BUFFIÈRE (1) - -
G. MICHEL (2) - -
A. CARDOSO 69,500 69,500
J. DRIJARD 42,500 43,000
I. GALLIENNE (3) - 4,800
F. LAYT (3) - 3,300
J. LEFEBVRE 39,000 44,000
E. Le MOYNE de SÉRIGNY 36,500 34,000
M. de LIMBURG STIRUM 26,000 25,000
G. MILAN (4) 31,000 24,000
J. MONVILLE 43,000 43,000
R. PEUGEOT 31,000 27,500
O. PIROTTE (3) - 4,800
T. de RUDDER (5) 33,000 24,700
A. de SÈZE 33,900 32,500
PJ. SIVIGNON (3) - 3,300
J. VEYRAT 31,000 26,500
Total 630,400 618,400
(1) Chief Executive Officer – does not receive attendance fees.
(2) Deputy Chief Executive Office as from November 3, 2010 – does not receive attendance fees.
(3) Director as from April 29, 2010.
(4) Director until November 3, 2010.
(5) Director until April 29, 2010.
It is specified that pursuant to the AMF Recommendation of
December 22, 2008 and confirmed on December 10, 2009:
p these amounts represent the entirety of the compensation paid
in 2010 by the Imerys group or by its controlling shareholders to
each of the members of the Board of Directors with respect to
the offices, responsibilities or other duties performed personally
by those members within or on behalf of the Imerys group;
p details of the compensation paid to Gérard Buffière and Gilles
Michel in their capacity as, respectively, Chief Executive Officer
and Deputy Chief Executive Officer of Imerys are given below
(see paragraph 3.3.2 of this chapter).
In accordance with applicable tax regulations, the amounts paid to
the non-French resident members of the Board of Directors give rise
to withholding tax in France.
❚ ALLOTMENT SCALE
The current allotment scale for attendance fees was determined by
the Board of Directors at its meeting of February 14, 2007 on the
proposal of the Appointments and Compensation Committee.
This new scale, applicable as from January 1, 2007, is as follows:
Gross amounts (euros)
Board of Directors Chairman 150,000 fixed per year
All members 20,000 fixed per year – 1,000 per attended meeting
Strategic Committee Chairman 25,000 fixed per year
All members and other Directors 1,500 per attended meeting
Audit Committee Chairman 25,000 fixed per year
All members 2,000 per attended meeting
Other Directors 1,500 per attended meeting
Appointments and Compensation Committee Chairman 15,000 fixed per year
All members and other Directors 1,500 per attended meeting
To encourage the participation of the Directors in the work of Committees of which they are not members, the Board decided to award them
a fixed attendance fee of €1,500 for each Committee meeting in which they take part.
98 2010 REGISTRATION DOCUMENT IMERYS
CORPORATE GOVERNANCE 3Compensation
3.3.2 EXECUTIVE MANAGEMENT
❚ CRITERIA
The compensation of the Chief Executive Officer, the Deputy Chief
Executive Officer and the Chief Operating Officer is set by the Board
of Directors on the proposal of the Appointments and Compensation
Committee. This proposal is intended to ensure competitiveness
with respect to the external market; in drafting its recommendations,
the Committee draws on assessments and comparisons made
periodically by specialized consultants.
This compensation includes a fixed part and a variable part.
The calculation of the variable part is based on economic
performance criteria and personal goals set down by the Board
of Directors on the recommendation of the Appointments and
Compensation Committee. The achievement of those goals is
measured and acknowledged annually by the Board of Directors
on the recommendation of the Appointments and Compensation
Committee. The variable part of compensation owed with respect
to a financial year is paid the following year, when all the items for its
calculation are known, in particular after the closing of the Group’s
definitive financial statements for the financial year in question.
For Gérard Buffière, Chief Executive Officer, and Gilles Michel,
Deputy Chief Executive Officer as from November 3, 2010, these
performance criteria were related in 2010 to the achievement of
a goal of net income from current operations and operating cash
flow generated by the Group during the year. For Gérard Buffière,
a multiplier of 0.8 to 1.5 may be applied to the resulting amount
according to the achievement of other specific goals the confidential
nature of which prevents their publication. A ceiling of 150% of the
fixed amount of Gérard Buffière’s compensation is set for the variable
part of his compensation.
For Gilles Michel, the amount of his variable compensation, based
solely on the achievement of the economic performance criteria
mentioned above, will be calculated pro rata to his presence in the
Group in 2010.
As previously stated, the Chief Executive Officer and the Deputy
Chief Executive Officer do not receive any attendance fees with
respect to their office as Director of the Company.
For Jérôme Pecresse, criteria for determining his variable
compensation in his capacity as Chief Operating Officer in 2010
were related, on one hand, to the achievement of the Group’s
financial goals for the year, which were identical to those set for the
Chief Executive Officer and, on the other hand, the achievement of
specific financial goals (related to trends in cash flow and current
operating income) for the Minerals for Ceramics, Refractories,
Abrasives & Foundry business group that he manages, and, finally,
the achievement of other specific goals the confidential nature of
which prevents their publication. A ceiling of 70% of the fixed amount
of Jérôme Pecresse’s compensation is set for the variable part of
his compensation.
Pursuant to the provisions of article L. 225-102-1 of the French Code
of Commerce and the recommendations resulting from the AFEP-
MEDEF Corporate Governance Code, the information given hereafter
concerns the compensation paid to Executive Corporate Officers
only. For the Company, this concerns the Chief Executive Officer, the
Deputy Chief Executive Officer and the Chief Operating Officer but
not the Chairman of the Board of Directors, who does not receive
any other compensation from the Company than the attendance
fees mentioned in section 3.1.1 of the present chapter as he does
not perform any executive duties.
❚ TABLE SUMMARIZING THE COMPENSATION ITEMS
(euros) 2009 2010
Executive Corporate Officers’ name and position
Gérard Buffière, Chief Executive Officer
Compensation due in respect of the financial year 1,388,661 632,556*
Valuation of the stock options awarded during the financial year na 303,600
Valuation of the performance shares awarded during the financial year 2,972,550 389,000
Total 4,361,211 1,325,156
Gilles Michel, Deputy Chief Executive Officer
Compensation due in respect of the financial year na 212,866*
Valuation of the stock options awarded during the financial year na 770,800
Valuation of the performance shares awarded during the financial year na 1,649,760
Total na 2,633,426
Jérôme Pecresse, Chief Operating Officer
Compensation due in respect of the financial year 593,387 362,358*
Valuation of the stock options awarded during the financial year na 151,800
Valuation of the performance shares awarded during the financial year 563,220 194,500
Total 1,156,607 708,658
(*) These amounts do not include the variable compensation owed with respect to financial year 2010 which will be paid in 2011 once determined by the Board
of Directors at its next meeting of April 28, 2011.
99IMERYS 2010 REGISTRATION DOCUMENT
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3
Compensation
❚ AMOUNTS
Amounts paid in 2010 and 2009
The amounts and breakdown of compensation and benefits in kind owed (fixed and variable parts for the year in question) and paid (fixed part
for the year in question and variable part for the previous year, paid during the year in question) by the Group to Executive Management with
respect to financial years 2009 and 2010 are as follows:
(euros) 2009 2010
Executive Corporate Officers’ name and position Amounts due Amounts paid Amounts due Amounts paid
Gérard Buffière, Chief Executive Officer
Fixed part 630,000 630,000 630,000 630,000
Variable part 756,000 87,600 nc (3) 756,000
Exceptional compensation - - - -
Attendance fees - - - -
Benefits (1) 2,661 2,661 2,556 2,556
Employee profit sharing (2) - - - -
Total 1,388,661 720,261 632,556 (3) 1,388,556
Gilles Michel, Deputy Chief Executive Officer
Fixed part na na 212,121 (4) 212,121 (4)
Variable part na na nc (3) na
Exceptional compensation na na - -
Attendance fees na na - -
Benefits (1) na na 745 745
Employee profit sharing (2) na na nc na
Total na na 212,866 (3) 212,866
Jérôme Pecresse, Chief Operating Officer
Fixed part 360,000 360,000 360,000 360,000
Variable part 226,800 78,120 nc (3) 226,800
Exceptional compensation - - - -
Attendance fees - - - -
Benefits (1) 2,468 2,468 2,358 2,358
Employee profit sharing (2) 4,569 9,904 nc 4,569
Total 593,387 450,492 362,358 (3) 593,727
(1) These benefits solely consist of the supply of a company car.
(2) Pursuant to the Employee Profit Sharing Agreement entered into by the Company.
(3) The amount of the variable compensation owed with respect to financial year 2010 which will be paid in 2011 is not determined yet; it is going to be determined by
the Board of Directors at its next meeting of April 28, 2011.
(4) Amount calculated pro rata to the presence of Gilles Michel in the Group in 2010, on the basis of an annual fixed compensation of €800,000.
The above amounts include all the compensation due or paid by the
Group to Gérard Buffière, Gilles Michel and Jérôme Pecresse with
respect to related financial years and the value of all the benefits in
kind due or received with respect to the financial years in question.
All the compensation and assimilated benefits granted to the Group’s
top managers (Executive Committee, including the Executive
Corporate Officers) and recorded as expenses during the years in
question are given in note 29 to the consolidated financial statements.
Moreover, the amount of the five highest compensations paid by
the Company with respect to 2010 was certified by the Statutory
Auditors.
Amounts to be paid in 2011
The Board of Directors will at its next meeting of April 28, 2011
appraise, on the recommendations of the Appointments and
Compensation Committee, the achievement by the Executive
Corporate Officers of the economic and personal goals that they were
respectively set for financial 2010. Consequently, it will determine the
amount of the variable compensation owed with respect to said
financial year, to be paid to them in 2011.
The Board will also examine and set down at that meeting the criteria
and goals that are applicable to the determination of the variable
compensation of the Executive Management with respect to 2011.
100 2010 REGISTRATION DOCUMENT IMERYS
CORPORATE GOVERNANCE 3Compensation
These decisions will be published for the purposes of permanent
information, in accordance with the AFEP-MEDEF Corporate
Governance Code.
The Board stated at its meeting of November 3, 2010 that Gilles
Michel’s fixed annual compensation (€800,000), as well as the criteria
for calculating his variable compensation (ceiling defined as one
year of his annual fixed compensation, to be determined according
to achievement of economic performance goals; application of a
coefficient from 0.8 to 1.2 according to the achievement of specific
goals), which it had set down, already took into account his possible
subsequent appointment as Chairman & Chief Executive Officer of
Imerys and that, consequently, they would remain unchanged in 2011
in the event of such an appointment.
❚ EMPLOYMENT CONTRACT, INDEMNITIES, PENSIONS AND OTHER BENEFITS
Employment
contractSupplementary
pension planIndemnities or benefits
due to end or change of dutiesIndemnities under a non
competition clause
Gérard Buffière, Chief Executive Officer Yes Yes Yes No
Gilles Michel, Deputy Chief Executive Officer No Yes Yes No
Jérôme Pecresse, Chief Operating Officer Yes Yes No No
Employment contract
In 1998, Gérard Buffière entered into an employment contract with
the Company, the effects of which were suspended by decision
of the Board of Directors on the day of his appointment and for
the duration of his term of office as Chief Executive Officer of the
Company. Consequently, given the wish voiced by Gérard Buffière
not to be renewed in his duties as Chief Executive Officer on April 28,
2011, his employment contract would resume effect from that date.
On that subject, Gérard Buffière has informed the Company of his
intention to retire.
At the time of the appointment of Gilles Michel as Chief Operating
Officer on November 3, 2010, the employment contract between
him and the Company was terminated, given the duties of Chairman
& Chief Executive Officer that he would be led to perform, in order
to comply in advance with the AFEP-MEDEF recommendations
published in October 2008.
At the time of the appointment of Jérôme Pecresse as Chief
Operating Officer on February 13, 2008, the Board of Directors
decided to maintain the employment contract binding him to the
Company since 1998, given the operating duties he continued to hold
in the Group as Vice-President, Ceramics, Refractories, Abrasives &
Foundry business group. Pursuant to the AMF Recommendation of
December 22, 2008 as confirmed on December 10, 2009, the non-
cumulative holding of a corporate office with an employment contract
does not apply to Delegate Chief Executive Officers.
End of contract indemnity
Gérard Buffière’s above-mentioned employment contract provided in
particular for indemnity, in the event of departure on the Company’s
initiative, equal to two years’ gross salary, including the indemnity
owed with respect to the applicable legal and collective agreement
framework. In order to comply with the provisions of the “TEPA Law”
in favor of work, employment and spending power of August 21, 2007,
the contract was amended with an additional clause, for the purposes
in particular of conditioning the indemnity for end of contract at the
Company’s initiative on performance criteria. Gérard Buffière having
already informed the Company of his intention to retire, this indemnity
would be groundless. Apart from those provisions, the Company has
no other commitments for the benefit of Gérard Buffière with respect
to the taking-up, end or change of his current duties.
Gilles Michel’s employment contract provides for an indemnity in the
event that his corporate office is terminated at the Company’s initiative
or in the event of forced departure linked to a change of control or
strategy. No indemnity would be due in the event of Gilles Michel’s
voluntary departure or if he was entitled to retire within a short period
of time. In accordance with the recommendations resulting from
the AFEP-MEDEF Corporate Governance Code and according to
the calculation terms provided below, the amount of Gilles Michel’s
severance indemnity will be calculated on the basis of a maximum of
two years’ compensation (fixed + variable). Pursuant to the provisions
of article L. 225-42-1 of the French Code of Commerce, the payment
of the severance indemnity provided for above would be subject and
proportional to performance conditions appraised on the basis of
the arithmetic average of the percentages of achievement of the sole
economic and financial goals of the last three financial years, as set
down for the determination of the variable compensation with respect
to each of those financial years. In addition, Gilles Michel benefits
from the social guarantee for company managers and executives
(GSC). All these commitments taken by the Company in favor of Gilles
Michel, in accordance with legal provisions, have been published on
the Company’s Website and notified to the Statutory Auditors for the
drafting of their special report on regulated commitments which will
be submitted to the approval of the Shareholders’ General Meeting
(see Chapter 2, paragraph 2.2.3 of the Registration Document).
Jérôme Pecresse’s employment contract does not provide, apart
from the applicable legal and collective agreement framework, for
any indemnity or other specific advantage with respect to the end
or change of his duties of Chief Operating Officer.
101IMERYS 2010 REGISTRATION DOCUMENT
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3
Stock options
Pension commitments
In 1985, Imerys set up a collective supplementary pension plan with
defined benefits for the principal managers of Imerys who met the
restrictive and objective eligibility criteria. The plan is managed by
an external insurance company.
The Executive Corporate Officers and one Director (Jacques Drijard),
in his capacity as a former executive of the Group, are among the
potential beneficiaries of the plan.
The maximum amount of the life annuity that may be paid to the
beneficiaries of the plan as from the liquidation of their pension rights
is calculated in order to guarantee them:
p a life annuity of a total annual gross amount (after allowing for
pensions from obligatory and other supplementary plans,
including the defined contribution supplementary pension plan)
of 60% of their reference salary (average of the last two years of
the beneficiary’s fixed plus variable compensation); said salary
is limited to 22 annual French social security ceilings (PASS);
p subject to a pay-in ceiling equal to 25% of said reference salary.
This plan also provides for the possibility of reversion of the life
annuity amount to the surviving partner(s) in proportion to the time
of union.
According to the latest actuarial calculation, the current value of the
estimated share of the four above-mentioned corporate officers in
the total amount of the Group’s commitment with respect to the
past services of all the beneficiaries of this supplementary pension
plan amounts to €7,682,702 as at the end of 2010 (compared with
€6,961,900 as at end 2009).
Furthermore, in order to reduce the booked expense caused by the
defined benefit plan and move closer to market practices, it was
decided to set up, as from October 1st, 2009, a defined contribution
supplementary pension plan for the benefit of some of Imerys’ top
managers, including the Delegate Chief Executive Officers.
Contributions to this scheme, set at 8% of the compensation of
eligible employees with a ceiling of 8 PASS, are made jointly by the
employee (for 3%) and the Company (for 5%). An external insurance
company has been appointed to manage the scheme.
All these commitments taken by the Company in favor of its
Executive Corporate Officers, in accordance with legal provisions,
have been published on the Company’s Website and notified to the
Statutory Auditors for the drafting of their special report on regulated
commitments. Those commitments were, as regards Gérard Buffière
and Jérôme Pecresse, approved by the Ordinary and Extraordinary
Shareholders’ General Meeting on April 29, 2010 and will be, as
regards Gilles Michel, submitted for approval at the Ordinary and
Extraordinary Shareholders’ General Meeting on April 28, 2011 (see
chapter 2, paragraph 2.2.3 of the Registration Document).
3.4 | STOCK OPTIONS (1)
3.4.1 STOCK OPTION PLANS IN FORCE
(1) For the sake of consistency, all the figures given in the present section are based on the split into 4 of the nominal value of Imerys shares on June 1, 2004.
❚ GRANT POLICY
The general policy for the granting of Imerys stock options is set by
the Board of Directors upon the Appointments and Compensation
Committee’s recommendations.
The main characteristics of the policy, excluding grants made under
the Group’s employee shareholding operations, are as follows:
p grants take the form of stock subscription options. This form
was judged preferable to stock purchase options as it prevents
the Company from having to tie up its capital before the option
exercise period even opens, in order to acquire on the market
the number of shares needed to fulfill possible option exercises;
p as from 1999, stock options are granted once a year and the total
number of options each year is adjusted according to the Group’s
overall performance or to specific events, the grant taking usually
place on the Annual General Meeting;
p the actual or likely beneficiaries of stock subscription options
are the Group’s executives (Chief Executive Officer, Deputy
Chief Executive Officer, Chief Operating Officer, members
of the Executive Committee, business group and division
management committees, main managers of the Group’s
corporate departments) as well as high-potential managers
and employees that make an outstanding contribution to the
Company’s performance;
p as from 2008, the grant of stock subscription options is combined,
in a single annual program, with the grant of performance shares
(see paragraph 3.5.1 of the present chapter).
102 2010 REGISTRATION DOCUMENT IMERYS
CORPORATE GOVERNANCE 3Stock options
In accordance with article L. 225-186-1 of the French Code of
Commerce, introduced by the French law of December 3, 2008
in favor of work earnings, the Board decided at its meeting of
February 15, 2011, on the recommendation of the Appointments
and Compensation Committee, that, subject to the renewal at the
Shareholders’ General Meeting of April 28, 2011 of the authorization
given to the Board to grant employees and corporate officers of
the Company and its subsidiaries, or to certain categories thereof,
subscription or purchase options on the Company’s shares (see
chapter 7, section 7.4 of the Registration Document), the grant of
such options to Executive Corporate Officers would be subject to
the payment of an additional collective profit-sharing bonus in the
sense of article L. 3314-10 of the French Labor Code, distributed in
accordance with the arrangements provided by the profit-sharing
agreements in force, except in the event of a dispensation agreement,
for the benefit of all the Company’s employees and at least 90% of
all employees of its French subsidiaries.
❚ CHARACTERISTICS OF GRANTED OPTIONS
As from 1999, the grant general policy excludes any discount of the
option exercise price: it is equal to the average Imerys share price
for the last 20 stock market trading days prior to the grant date i.e.
usually on the day of the Annual General Meeting. It will be put to
the Shareholders’ General Meeting of April 28, 2011, called to rule
on the authorization to be given to the Board to grant options for
subscription or purchase of the Company’s shares to employees or
officers of the Company and its subsidiaries, or to certain categories
of them (see chapter 7, section 7.4 of the Registration Document) to
expressly exclude any discount of the option exercise price.
The duration of the options granted under the plans set up since
2001 is 10 years.
The options granted since 1996 are in principle definitively vested
(except in the event of the beneficiary’s dismissal, resignation of
departure from the Group) after the end of the third year following
their allotment or, if earlier, on the date of the beneficiary’s retirement
after the age of 63 (reference age included in the 2009 and
2010 plans, previously set at 60 years), his/her cessation of activity
for incapacity or his/her death. The only exception concerns grants
made within employee shareholding operations, for which the options
are dependent on the employee’s investment in Imerys shares with
immediate vesting.
Option exercise conditions
Definitively vested options may be exercised at any time, except in
the event of the beneficiary’s death or, as from the 2004 option plan,
departure from the Group.
However, the beneficiary must bear any additional costs and taxes
borne by the Company in the event that applicable local regulations
provide for a longer immobilization period than three years (this
period is four years in France for plans adopted as from April 2001).
Exercise by the beneficiary must comply with certain minimum
amounts (currently set for all plans adopted as from 2008 at
500 options, any whole multiple of 500 or the balance of outstanding
options if less than 500).
Loss or maintaining of options
Options not exercised on expiry of their exercise period are
automatically cancelled.
The beneficiary’s departure from the Group for any reason (including
in principle if the company employing him or her is excluded from
the Group and except in the event of his or her death, incapacity or
retirement), brings about:
p if the departure takes place before the vesting date of the options,
their immediate cancellation;
p if the departure takes place after the vesting date of the options
and only for plans adopted from 2004 onward, the cancellation
of said options failing their exercise by the beneficiary by the end
of the third month following his or her departure from the Group.
Date of record of shares resulting from the exercise of options
All Imerys shares resulting from the exercise of subscription options
enjoy, from their creation, all the rights attached to existing shares,
with which they are immediately assimilated.
Consequently, new and old shares are listed on the same line on
NYSE Euronext, regardless of their date of issue. The new shares
enjoy the same dividend rights as old shares, including with respect
to the dividends approved and paid during the year of creation of the
shares with respect to results for the previous financial year.
❚ OPTION PLAN ADOPTED IN 2010
482,800 stock subscription options at the exercise price of
€46.06 per share were granted on April 29, 2010 to 155 managers
and executives of the Group residing in France or in other countries
(vs. 166 in 2009).
Apart from the options granted to the Executive Corporate Officers,
120,900 were granted to the 10 beneficiaries receiving the most
options.
82,000 stock subscription options at the exercise price of €44.19 per
share were granted on November 3, 2010 to Gilles Michel, Deputy
Chief Executive Officer (see section 3.4.2 of the present chapter).
❚ CHANGES IN THE NUMBER OF OPTIONS IN 2010 (1)
The total number of stock subscription options in existence on
December 31, 2010 is 4,170,563, representing 5.20% of Imerys’
share capital on that date after dilution; their weighted average
exercise price is €49.29.
In 2010, 134,204 stock subscription options were cancelled; 213,302
were exercised by 475 beneficiaries at a weighted average price of
€28.55.
(1) Including options granted under employee shareholder plans.
103IMERYS 2010 REGISTRATION DOCUMENT
CORPORATE GOVERNANCE
3
Stock options
3.4.2 CONDITIONAL STOCK OPTIONS GRANTED BY THE COMPANY TO ITS EXECUTIVE CORPORATE OFFICERS IN 2010 (1)
Date of Plan Kind of options
Valuation of options *
(euros)
Number of options granted in
2010Exercise price
(euros) Exercise period
Gérard Buffière,
Chief Executive Officer April 29, 2010 Stock subscription options 303,600 40,000 46.06
April 29, 2013
April 28, 2020
Gilles Michel,
Deputy Chief Executive Officer November 3, 2010 Stock subscription options 770,800 82,000 44.19
March 1, 2014
November 2, 2020
Jérôme Pecresse,
Chief Operating Officer April 29, 2010 Stock subscription options 151,800 20,000 46.06
April 29, 2013
April 28, 2020
(*) Valuated at the time of their grant as used with respect to the application of IFRS 2, before the spread of the expense over the acquisition period.
(1) This information only concerns the options granted by the Company and does not include any Imerys share purchase options that may be granted to corporate
officers by the controlling shareholders that they represent.
The Board of Directors, at its meetings of April 29, 2010 and
November 3, 2010, decided, on the recommendation of the
Appointments and Compensation Committee, to grant to its
Executive Corporate Officers stock options which are conditioned
by and proportionate to the achievement of economic performance
goals related to the growth of:
p the Group’s net current operating income per share and the
Group’s ROCE (return on capital employed) during the 2010-2012
period for the grant to Gérard Buffière and Jérôme Pecresse with
respect to the 2010 April Plan; and
p the Group’s ROCE during the 2011-2013 period for the grant to
Gilles Michel with respect to the 2010 November Plan.
On those occasions, the Board of Directors confirmed as needed the
restrictive rules in terms of holding and keeping shares set by it at
its meeting of February 15, 2010 pursuant to the recommendations
of the AFEP-MEDEF Corporate Governance Code (see section 3.6
of the present chapter).
❚ HOLDINGS AND CHANGES
As of December 31, 2010, the total number of stock options held by
the Executive Corporate Officers (Chief Executive Officer, Deputy
Chief Executive Officer and Chief Operating Officer) is 904,547,
compared with 841,898 as on December 31, 2009 (which included
at that date the Chief Executive Officer and Chief Operating Officer),
i.e. 1.13% of Imerys’ share capital on that date after dilution; their
weighted average exercise price is €49.01.
In 2010, 79,308 stock subscription options were exercised by
Executive Corporate Officers at a weighted average price of €28.09
(see details in the table appearing in paragraph 3.4.3 of the present
chapter).
❚ SPECIFIC TERMS AND RESTRICTIONS
In addition to the economic performance goals mentioned above,
the other specific terms and restrictions which are applicable to
the grants of stock subscription options to the Executive Corporate
Officers, common to the grants of free shares, are given under
section 3.6 of the present chapter.
104 2010 REGISTRATION DOCUMENT IMERYS
CORPORATE GOVERNANCE 3Stock options
3.4.3 DETAILS OF STOCK OPTION PLANS IN FORCE (1)
The following table summarizes the history, status and main characteristics of the stock option plans in force as on December 31, 2010:
Nov.
2010April2010
August 2009
April 2008
May 2007
Nov. 2006 (2)
May 2006
Initial grant
Authorization: date of Shareholders’ General Meeting 04/30/08 04/30/08 04/30/08 04/30/08 05/03/05 05/03/05 05/03/05
Date of Board of Directors / Supervisory Board
or Managing Board meeting 11/03/10 04/29/10 07/29/09 04/30/08 05/02/07 11/07/06 05/02/06
Opening date of option exercise period (3) 03/01/14 04/29/13 08/14/12 04/30/11 05/03/10 02/01/07 05/03/09
Option expiration date 11/02/20 04/28/20 08/13/19 04/29/18 05/01/17 11/06/16 05/01/16
Share subscription price €44.19 €46.06 €34.54 €54.19 €65.61 €62.31 (4) €63.53
Total number of initial beneficiaries 1 155 166 183 160 2,932 171
Total number of options initially granted,
of which to the Executive Corporate Officers: 82,000 482,800 464,000 497,925 560,000 38,770 640,000
- to G. Buffière, Chief Executive Officer - 40,000 - - 60,000 15 90,000
- to G. Michel, Deputy Chief Executive Officer 82,000 n.a. n.a. n.a. n.a. n.a. n.a.
- to J. Pecresse, Chief Operating Officer - 20,000 - 28,000 23,000 15 22,500
- to the ten Group employees who received
the most options - 120,900 206,750 198,150 154,000 150 157,500
Change during financial 2010
Number of options remaining to be exercised
on 01/01/2010 n.a. n.a. 464,000 515,840 500,557 43,780 592,389
Number of shares subscribed in 2010, of which: n.a. n.a. n.a. n.a. - - -
- by G. Buffière, Chief Executive Officer n.a. n.a. n.a. n.a. - - -
- by G. Michel, Deputy Chief Executive Officer n.a. n.a. n.a. n.a. n.a. n.a. n.a.
- by J. Pecresse, Chief Operating Officer n.a. n.a. n.a. n.a. - - -
- by the ten Group employees who received
the most options n.a. n.a. n.a. n.a. - - -
Number of options cancelled (6) in 2010 - - (5,000) (22,947) (19,615) - (52,820)
Number of options remaining to be exercised
on 12/31/2010 (7) of which: 82,000 482,800 459,000 492,893 480,942 43,780 539,569
- by G. Buffière, Chief Executive Officer - 40,000 - - 64,482 17 96,714
- by G. Michel, Deputy Chief Executive Officer 82,000 n.a. n.a. n.a. n.a. n.a. n.a.
- by J. Pecresse, Chief Operating Officer - 20,000 - 30,092 24,719 17 24,179
(1) The above mentioned figures are given, if needed, after the adjustments made on June 2, 2009 following the share capital increase of Imerys.
(2) Employee Shareholder Plans.
(3) Not including longer tax immobilization periods that may be applicable locally.
(4) Except for different subscription prices applicable locally.
(5) Of which 200,000 pursuant to the Group’s achievement of economic and financial results in financial years 2004 to 2006.
(6) Following the beneficiaries’ departure from the Group.
(7) Following cancellation and exercise of the options since the date of approval of the plan in question and reintegrations, if any.
105IMERYS 2010 REGISTRATION DOCUMENT
CORPORATE GOVERNANCE
3
Stock options
May 2005
May2004
Oct. 2003 (2)
May 2003
Oct. 2002 (2)
May 2002
Oct. 2001 (2)
May 2001
Nov. 2000 (2)
May 2000
05/03/05 05/06/02 05/06/02 05/06/02 05/06/02 05/06/02 05/09/00 05/09/00 05/09/00 05/09/00
05/03/05 05/03/04 10/21/03 05/05/03 10/21/02 05/06/02 10/19/01 05/09/01 11/06/00 05/09/00
05/04/08 05/03/07 10/22/06 05/05/06 10/22/05 05/06/05 10/20/04 05/09/04 11/07/03 05/09/03
05/02/15 05/02/14 10/21/13 05/05/13 10/21/12 05/05/12 10/19/11 05/08/11 11/06/10 01/31/10
€53.58 €45.49 €37.80 €26.34 €27.39 €30.47 €23.01 €26.52 €25.25 €29.94
171 166 925 201 1,474 181 1,416 169 1,961 145
Total
635,000 840,000 37,424 747,720 68,328 652,000 73,784 711,240 72,808 570,520 7,174,319
80,000 260,000 (5) 60 80,000 60 30,000 60 32,000 40 28,500 700,735
n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 82,000
20,000 36,000 60 21,400 60 9,000 60 8,560 40 5,700 194,395
140,000 109,600 360 145,580 720 90,000 n.a. n.a. n.a. n.a. 1,323,710
530,965 646,053 33,906 311,699 39,140 130,062 30,175 78,224 26,309 10,170 3,953,269
- 12,029 1,680 70,684 4,032 49,443 4,203 45,101 15,960 10,170 213,302
- - - - - 32,244 - 34,391 - - 66,635
n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
- - - 12,500 65 - 65 - - 43 12,673
- 2,580 130 43,986 195 2,150 295 4,988 258 3,011 57,593
(15,693) (7,749) - - - - (31) - (10,349) - (134,204)
515,272 626,275 32,226 241,015 35,108 80,619 25,941 33,123 - - 4,170,563
85,976 279,422 65 85,984 65 - 65 - - - 652,790
n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 82,000
21,494 38,690 65 10,501 - - - - - - 169,757
106 2010 REGISTRATION DOCUMENT IMERYS
CORPORATE GOVERNANCE 3Free shares
3.5 | FREE SHARES
3.5.1 CONDITIONAL FREE SHARE PLANS IN FORCE
❚ GRANT POLICY
Following the favorable recommendation made by the Appointments
and Compensation Committee, in 2006 the Board of Directors for the
first time awarded free conditional grants of shares in the Company.
At the time, the Board intended to reserve that grant for exceptional
cases in favor of a limited number of Group executives (which could
not include the Chief Executive Officer) in charge of carrying out
specific medium-term action plans that were judged priorities for
the Group.
In 2008, the Appointments and Compensation Committee examined,
with the support of a specialized external consultant, the suitability
of a possible extension of that grant policy to a greater number
of beneficiaries by combining it with the existing policy of stock
option subscription grants in a single long-term Group policy for
retaining their beneficiaries. In accordance with the Appointments
and Compensation Committee’s recommendations, the new general
policy set down by the Board provides in principle for the grant
to each beneficiary of a total number of rights giving access to
share capital comprised of a combined ratio of stock subscription
options and free shares subject to the achievement of economic
performance goals.
In accordance with article L. 225-197-6 of the French Code of
Commerce, introduced by the French law of December 3, 2008
in favor of work earnings, the Board decided at its meeting of
February 15, 2011, on the recommendation of the Appointments
and Compensation Committee, that, subject to the renewal at the
Shareholders’ General Meeting of April 28, 2011 of the authorization
given to the Board to grant employees and corporate officers of
the Company and its subsidiaries, or to certain categories thereof,
Company’s free shares (see chapter 7, section 7.4 of the Registration
Document), the grant of such shares to Executive Corporate Officers
would be subject to the payment of an additional collective profit-
sharing bonus in the sense of article L. 3314-10 of the French Labor
Code, distributed in accordance with the arrangements provided
by the profit-sharing agreements in force, except in the event of
a dispensation agreement, for the benefit of all the Company’s
employees and at least 90% of all employees of its French
subsidiaries.
❚ MAIN CHARACTERISTICS OF CONDITIONAL FREE SHARES
Vesting of shares
The granted free shares are vested upon the expiry of a period
that, in accordance with the legal provisions in force, may not be
less than two years from their grant date, subject in principle to the
achievement of certain economic and financial goals that cannot
be appraised over a single year. The number of vested shares is
conditioned on and proportionate to the achievement of those goals.
Loss of shares
The departure of the beneficiary from the Group before the expiry of
the vesting period entails the loss of all rights to the vesting of his or
her conditional free shares, except in the event of death, incapacity or
retirement of the beneficiary whose rights will be retained according
to the specific terms set forth by each related plan.
Keeping vested shares
The minimum time for which beneficiaries must keep shares may
not in principle be less than two years from the date of vesting; that
keeping period can however be removed in cases where the vesting
period has a duration equal to four years. After the keeping period, if
any, the beneficiaries may dispose freely of such shares.
❚ CONDITIONAL FREE SHARE PLANS ADOPTED IN 2010
186,700 free shares conditional on the achievement of economic
performance goals (“performance shares”), were granted in 2010 to
156 Group managers residing in France or abroad (vs. 169 in 2009).
The vesting and number of the performance shares granted with
respect to the plans adopted by the Board in 2010 are conditioned
by and proportionate to the achievement of a goal of growth of:
p the Group’s net current operating income per share and the
Group’s ROCE (return on capital employed) during the 2010-
2012 period with respect to the 2010 April Plan; and
p the Group’s ROCE during the 2011-2013 period with respect to
the 2010 November Plan that was granted exclusively for the
benefit of Gilles Michel.
Apart from those granted to the Executive Corporate Officers, 54,225
performance shares were granted to the 10 beneficiaries receiving
the highest number of those shares.
107IMERYS 2010 REGISTRATION DOCUMENT
CORPORATE GOVERNANCE
3
Free shares
❚ CHANGES IN THE NUMBER OF CONDITIONAL FREE SHARES IN 2010
The total number of conditional free shares in existence on December 31, 2010 was 488,429, which represents 0.61% of Imerys’ share capital
on that date after dilution.
In 2010, 3,711 free shares were cancelled and 42,984 vested.
❚ DETAILS OF CONDITIONAL FREE SHARE PLANS IN FORCE
Grant date
Number of initial
beneficiaries
Number of shares
initially granted
Number of remaining
shares as on 01/01/2010
Number of shares cancelled
in 2010
Number of shares vested in
2010
Number of shares
as on 12/31/2010
Vesting date of shares
Date of end of share holding period
April 2008 conditional
free share plan April 30, 2008 184 96,232 101,418 (1) 2,461 42,984 55,973 April 30, 2011 (2) April 30, 2013 (2)
August 2009
conditional free share
plan August 14, 2009 169 247,006 247,006 1,250 0 245,756 August 14, 2013 (3) August 14, 2013 (4)
April 2010 conditional
free share plan April 29, 2010 155 144,700 - 0 0 144,700 April 29, 2014 (5) April 29, 2014 (6)
November 2010
conditional free share
plan (7) November 3, 2010 1 42,000 - 0 0 42,000 March 1st, 2014 March 1st, 2016
(1) This number takes into account the adjustments made on June 2, 2009 following the increase in the Company’s share capital.
(2) Dates applicable to all beneficiaries except the Chief Executive Officer for which the plan provides for a vesting date as on April 30, 2010 and an end date of the
holding period as on April 30, 2012.
(3) For the beneficiaries resident outside France; August 14, 2011 for the members of the Executive Management and August 14, 2012 for the other beneficiaries
resident in France.
(4) For the beneficiaries resident outside France and the members of the Executive Management; August 14, 2014 for the other beneficiaries resident in France.
(5) For the beneficiaries resident outside France; April 29, 2013 for the beneficiaries resident in France, including members of the Executive Management.
(6) For the beneficiaries resident outside France; April 29, 2015 for the beneficiaries resident in France, including members of the Executive Management.
(7) Plan granted exclusively for the benefit of Gilles Michel, Director and Deputy Chief Executive Officer as from November 3, 2010.
3.5.2 PERFORMANCE SHARES GRANTED BY THE COMPANY TO ITS EXECUTIVE CORPORATE OFFICERS IN 2010
Date of PlanNumber of shares
granted in 2010Valuation of shares (1)
(euros) Vesting date Availability datePerformance
conditions
Gérard Buffière,
Director and Chief
Executive Officer April 29, 2010 10,000 389,000 April 29, 2013 April 29, 2015 Yes
Gilles Michel,
Director and Deputy Chief
Executive Officer November 3, 2010 42,000 1,649,760 March 1st, 2014 March 1st, 2016 Yes
Jérôme Pecresse,
Chief Operating Officer April 29, 2010 5,000 194,500 April 29, 2013 April 29, 2015 Yes
(1) Valuated at the time of their grant as used with respect to the application of IFRS 2, after taking into account notably any discount related to performance criteria
and the probability of presence in the Company following the vesting period, but before the spread of the expense over the acquisition period.
All the shares granted to Gérard Buffière, Chief Executive Officer, and
Jérôme Pecresse, Chief Operating Officer, with respect to the April
2010 Plan, are subject to the achievement of the same economic
performance goals as those provided with respect to the 2010
general performance shares plan intended for the Group’s other
top managers; these goals are related to the growth of the Group’s
net current operating income per share and the Group’s ROCE during
the 2010-2012 period.
These performance shares will be vested, according to the
achievement of their economic goals to which they are subject,
upon the expiry of a period of three years following their grant date;
shares must be kept for a period of two years as from their vesting.
These conditions are also identical to those provided under the 2010
general performance shares plan intended for the Group’s other top
managers.
108 2010 REGISTRATION DOCUMENT IMERYS
CORPORATE GOVERNANCE 3Specific terms and restrictions applicable to grants to executive corporate officers
The performance shares granted to Gilles Michel, Deputy Chief
Executive Officer, with respect to the November 2010 Plan, are
subject to the achievement of economic performance goals related to
the growth of the Group’s ROCE during the 2011-2013 period. These
performance shares will be vested, according to the achievement of
their economic goals to which they are subject, upon the expiry of a
period exceeding three years following their grant date, shares must
be kept for a period of two years as from their vesting.
❚ HOLDING AND CHANGES
The total number of conditional free shares granted, but not vested
yet, to the Chief Executive Officer, Deputy Chief Executive Officer
and Chief Operating Officer is 173,224 as on December 31, 2010,
compared with 159,208 on December 31, 2009, i.e. 0.20% of
Imerys’ share capital on that date after dilution. These figures take
into account the adjustments made on June 2, 2009 following the
increase in the Company’s share capital.
The Board of Directors at its meeting of April 29, 2010 acknowledged
that 42,984 conditional free shares (number adjusted following the
share capital increase of the Company on June 2, 2009) were
definitely allocated to Gérard Buffière, the condition to which the
vesting was subject being fulfilled. These shares are subject to a
holding period of two years, i.e. until April 29, 2012, as well as to the
restrictive holding and keeping rules set out in section 3.6 hereafter.
No other conditional free shares granted to the members of the
Executive Management became available in 2010.
❚ SPECIFIC TERMS AND RESTRICTIONS
In addition to the economic performance goals mentioned above,
the other specific terms and restrictions which are applicable to the
grants of conditional free shares made to the Executive Corporate
Officers, common to grants of stock subscription options, are set
out in section 3.6 hereafter.
3.6 | SPECIFIC TERMS AND RESTRICTIONS APPLICABLE TO GRANTS TO EXECUTIVE CORPORATE OFFICERS
The Board of Directors, pursuant to the recommendations of the
Appointments and Compensation Committee, and in accordance
with the provisions of articles L. 225-185 and L. 225-197-2 of the
French Code of Commerce, confirmed, as need be, at its meeting
of April 29, 2010 and November 3, 2010 during which it granted
conditional stock subscription options and performance shares to
its Executive Corporate Officers, the restrictive rules on holding and
keeping shares it set down at its meeting of February 15, 2010. Thus,
the Chief Executive Officer, the Deputy Chief Executive Officer and
the Chief Operating Officer shall each hold on a registered basis,
until the date of termination of their respective duties as Executive
Corporate Officers of Imerys:
p as regards the grants of stock subscription options: a number of
shares resulting from each option exercise corresponding to at
least 25% of the net gain realized upon each exercise (net of the
amount needed to fund that exercise, and of any related taxes
and obligatory contributions);
p as regards the grants of performance shares: a number of
shares at least equal to 25% of the total number of vested shares
following the applicable vesting period,
until the total amount (1) of the shares held (2) by each of them reaches,
upon the exercise of stock subscription options and the availability of
performance shares, a coefficient equal to: 300% of the last annual
fixed compensation on the date in question for the Chief Executive
Officer and the Deputy Chief Executive Officer, and 125% for the
Chief Operating Officer.
On these occasions, the Board also confirmed that:
p this keeping rule applies to the grants made with respect to
the stock subscription option and conditional free share plans
implemented by the Company as from: for Gérard Buffière,
January 1st, 2007; for Gilles Michel, November 3, 2010 and for
Jérôme Pecresse, February 13, 2008 (date of their respective first
appointment as Corporate Officer of the Company);
p the total amount of investment in shares of the Company shall take
into account all the shares held by the Chief Executive Officer, the
Deputy Chief Executive Officer and the Chief Operating Officer,
respectively, on the date in question, regardless of their origin
(purchase on the market, exercise of stock subscription options
or shares acquired under conditional free share grant plans).
Given all these holding and keeping rules imposed on Executive
Corporate Officers, the Board of Directors judged that it was not
necessary to also make the purchase of additional shares on the
market a condition for the grant of performance shares.
The Board noted, at its meeting of April 29, 2010, that the grant
of conditional stock subscription options and performance shares
awarded on that date to the Executive Corporate Officers was
within the limits it had set at its meeting of July 29, 2010 pursuant to
the recommendations resulting from the AFEP-MEDEF Corporate
Governance Code: ceiling of the value (under IFRS) of the conditional
stock options and performance shares, granted to each of them, at
(1) Estimated on the basis of the share price on the date of each option exercise or the date of availability of the free shares in question.
(2) After the sale of those needed, as the case may be, to fund the option exercise or the settlement of any taxes, contributions or expenses with respect to the
transaction.
109IMERYS 2010 REGISTRATION DOCUMENT
CORPORATE GOVERNANCE
3
Corporate officers’ transactions in securities in the Company
one year of their respective gross annual compensation (fixed part
+ maximum variable part).
At its meeting of November 3, 2010, the Board of Directors
judged that the grant made to Gilles Michel at the time of his initial
appointment as Director and Deputy Chief Executive Officer of the
Company was of an exceptional nature. The exceeding of a year’s
compensation, as mentioned above, was justified by the wish to
retain Gilles Michel for the long term and to involve him significantly
in the development of the Group’s shareholder value.
The Board will examine on April 28, 2011, at the renewal of the
authorization given to the Board by the Shareholders’ General
Meeting to grant stock subscription options and performance shares,
the maximum percentage of options and shares that may be granted
to the Executive Corporate Officers in relation to the total envelope
to be voted by shareholders.
Pursuant to the recommendations resulting from the AFEP-MEDEF
Corporate Governance Code, all these conditions were published
as permanent information on the Company’s website.
3.7 | CORPORATE OFFICERS’ TRANSACTIONS IN SECURITIES IN THE COMPANY
The Board of Directors adopted a Procedure for the prevention of
use or disclosure of insider information within the Imerys group. This
policy adopted in its initial version in July 2002, last amended in
February 2011, is appended to the Internal Charter of the Board of
Directors.
The policy defines permanent and occasional insiders; sets out the
Company’s obligation to draw up a list of insiders for the Group
and determines the related arrangements. It also reiterates the rules
with respect to transactions by corporate officers in Imerys shares
or, as the case may be, any other securities issued by the Group or
any financial instruments (“Imerys Actions” mutual fund, MONEP,
warrants, convertible bonds, etc.) that are related to Imerys shares
(“Imerys securities”).
In accordance with the general principle that applies to Insiders,
whether permanent or occasional, any corporate officer and
related persons must, in the event that they directly or indirectly
hold privileged information, before the public has knowledge of
such information, refrain from carrying out any transaction, including
forward transactions, in Imerys securities.
To make its implementation easier, the Board of Directors, at its
meeting of February 15, 2011, appointed the Group’s General
Counsel and Secretary of the Board as ethics officer, tasked with
providing, on request from any concerned party, an opinion prior to
the transactions on the Company’s securities under consideration
by corporate officers. This decision is in line with AMF guidelines for
preventing insider misconduct by executives of stock market-listed
companies. The opinion given by the ethics officer is purely advisory.
The obligation to refrain from trading also covers any transaction
in Imerys securities (including as hedging) during the 15 calendar
days leading up to the announcement of the Group’s estimated
or definitive annual, half-yearly or quarterly results, and the day
of that announcement, known as the “negative window period”; it
concerns corporate officers, but also other permanent or occasional
Insiders such as the Group’s main support or line managers or any
employees that directly take part in drawing up those consolidated
financial statements, who are considered as regularly or occasionally
likely to hold insider information because of their positions and
responsibilities.
The annual schedule of announcements of the Group’s consolidated
results as well as the resulting schedule of negative window periods
are supplied to the Directors at the end of the previous year; it may
be consulted at any time on the Group’s website, is given regularly
in the Chief Executive Officer’s quarterly letter to shareholders and
is available on request from the Group’s Financial Communication
Department.
The Board of Directors examined in 2009 the recommendation
of the AFEP-MEDEF Corporate Governance Code requesting the
corporate officers of a stock market-listed company to refrain from
trading on its shares as long as they have access, in consideration of
their functions, to information which has not been made public yet.
The Board confirmed and kept the obligation to refrain from trading
it had previously adopted, stating however that this obligation will
continue not to apply to the subscription or purchase of shares by
the exercise of options. It indeed considered that the mere exercise
of options was not speculative in nature, since the exercise price was
established beforehand and only the prohibition from transferring
the shares resulting from the exercise of options during the negative
window period was necessary. Moreover, the transparency of those
operations was fully guaranteed by the obligation to declare to AMF
the transactions made in securities in the Company, including by
the exercise of options, pursuant to legal and regulatory provisions.
Furthermore, the Group’s policy prohibits insiders from making any
leveraged transaction or speculative transactions (short sales or bull
purchases of shares, extension of orders on deferred settlement and
delivery services, very short turnaround purchase/sale transactions,
etc.) in Imerys securities. To comply with the recommendation of
the AFEP-MEDEF Corporate Governance Code, that prohibits risk
hedging transactions by Executive Corporate Officers who are
beneficiaries of stock options and/or performance shares, Gérard
Buffière and Jérôme Pecresse on November 3, 2009, as well as Gilles
Michel on November 3, 2010, expressed in front of the Board their
commitment not to resort to the use of any risk hedging transactions
in respect of their stock options and performance shares granted or
to be granted to each of them during their respective term of office.
110 2010 REGISTRATION DOCUMENT IMERYS
CORPORATE GOVERNANCE 3Corporate officers’ transactions in securities in the Company
Finally, in accordance with applicable legal requirements, the
corporate officers and, under their personal responsibility, all related
individuals, must:
p hold the Imerys shares they own in registered form, either directly
in their names with the Company or its securities manager or
through management by the intermediary (bank, financial
institution or broker) of their choice;
p declare individually to the AMF any transactions carried out on
Imerys securities within five trading days of such transactions and
inform the Company thereof.
Pursuant to the provisions of article 223-26 of AMF’s General
Regulations, the table below summarizes the transactions made
in securities in the Company by corporate officers in 2010 and, as
the case may be, any related persons, as declared to the AMF and
published on its website (www.amf-france.org).
Declaring or related person CapacityFinancial
instrument NumberNature
of operationNumber
of operationsAmount
of operations
Aimery Langlois-Meurinne Chairman of the Board Shares 20,000 Sale 2 €851,366
Gérard Buffière Director and Chief Executive Officer Stock options 66,635 Exercise 2 €1,894,524
Jérôme Pecresse Chief Operating Officer
Stock options
Shares
12,673
12,673
Exercise
Sale
5
3
€333,612
€597,074
Ian Gallienne Director Shares 100 Acquisition 1 €4,530
Fatine Layt Director Shares 100 Acquisition 1 €4,557
Olivier Pirotte Director Shares 600 Acquisition 1 €26,910
Pierre-Jean Sivignon Director Shares 100 Acquisition 1 €4,559
44.1 RISK FACTORS 112
4.1.1 Risks related to Imerys’ business 112
4.1.2 Industrial and environmental risks 114
4.1.3 Legal risks 114
4.1.4 Risks relating to fi nancial markets 116
4.1.5 Risk insurance and coverage 116
4.2 INTERNAL CONTROL 1174.2.1 Report of the Chairman of the Board of Directors 117
4.2.2 Statutory Auditors’ Report 124
RISK FACTORS AND INTERNAL CONTROL
112 2010 REGISTRATION DOCUMENT IMERYS
RISK FACTORS AND INTERNAL CONTROL 4Risk factors
4.1 | RISK FACTORS
From now on, an analysis process of the major risks is regularly
conducted within the Group, resulting in the mapping of the potential
impact of each identified risk and the extent to which it is controlled.
This risk analysis and management process is described in detail in
the Report of the Chairman of the Board of Directors in section 4.2
of the present chapter.
The main risks and risk factors the Group is facing and their
management as well as associated control methods are presented
hereafter in order of importance in each category.
4.1.1 RISKS RELATED TO IMERYS’ BUSINESS
❚ MINERAL RESERVES AND RESOURCES
Mineral reserves and resources form one of the Group’s primary
assets and the foundation of the main part of its activities. Their
accurate assessment is critical to the management and development
of Imerys’ operations.
Tonnages and values of mineral reserves and resources are estimates
of the size and quality of ore deposits based mainly on the geological,
technical, economic or market parameters available at a given time.
Because of unforeseeable changes in these parameters and the
uncertainty naturally inherent in evaluating resources, no absolute
guarantee can be given for those estimates.
Imerys has set up an internal network of experts who are responsible
for evaluating the Group’s mineral resources and reserves for each
of its operating activities. Under the responsibility of the Group Chief
Geologist, these experts carry out an annual consolidated review
of the Group’s mineral reserves and resources according to the
principles presented in chapter 1, section 1.3 of the Registration
Document.
This appraisal is presented annually to the Executive Committee. The
process and resources used to ensure its reliability are examined by
the Audit Committee.
Appraisal methods, calculations and the mining plans drawn up by
each site, including the renewal of administrative authorizations and
operating permits (see paragraph 4.1.3 of the present chapter), are
audited over a three-year cycle, either by independent experts for the
Group’s main sites or internally for the remaining sites. Furthermore,
since 2007, the appraisal process for some of the Group’s most
significant entities has been reviewed through internal control self-
assessment questionnaires (see section 4.2 of the present chapter).
The Group Chief Geologist has the widest powers to take action
on the mining plans proposed by the activities in order to ensure
the plans are consistent with the Group’s long-term policy and/or
its employee workplace safety policy and its environmental policy.
❚ MARKET ENVIRONMENT
The diversity of its minerals, end markets, customers and locations
gives the Group strong strategic positions while dispersing its
global risk profile. However, the Group’s business remains sensitive
to changes in macroeconomic conditions. Whereas the effect of
those changes varies according to the end markets and geographic
zones where the Group operates, the simultaneous deterioration
of conditions on several markets and geographic zones could
nevertheless have an adverse combined impact on its activity, results
and financial position.
The goal of Imerys’ people is to constantly optimize management of
existing activities by working to develop innovative, high value-added
new products, penetrate new markets, and control production costs
and overheads or even reduce them while adapting to temporary and
structural evolutions. Each activity seeks to establish and strengthen
its leadership on major markets and, more generally, enhance all the
Group’s competitive advantages in areas such as mining reserves,
marketing, technology, logistics and human resources. Details of the
Group’s activities are given in chapter 1 of the Registration Document.
Information on the performance of activities, market trends,
the measures taken to adapt to them and the strategies under
consideration are periodically reviewed by the Executive Committee,
the Strategic Committee and the Board of Directors through
processes for the 5-year strategic plans, annual budgets and
quarterly results reviews (see section 4.2 of the present chapter).
❚ EXTERNAL GROWTH OPERATIONS
In all its activities worldwide, Imerys implements a growth strategy
that combines organic growth and acquisitions (see chapter 1,
section 1.2 of the Registration Document). In that context, the Group
frequently makes acquisitions of activities or companies and creates
joint ventures. These operations inherently entail risks relating to
the appraisal of the corresponding assets and liabilities and the
integration of the acquired personnel, activities, technologies and
products or changes in relations with the relevant partners.
Imerys has set up stringent internal control procedures that cover the
analysis of potential targets (with the application of strict investment
profitability criteria and the performance of in-depth due diligence),
the review and acceptance of contractual terms and conditions
for the completion of the operations (including commitments by
sellers to indemnify against hidden liabilities) and the preparation
113IMERYS 2010 REGISTRATION DOCUMENT
RISK FACTORS AND INTERNAL CONTROL
4
Risk factors
work, implementation and follow-up of the acquired activities or
companies integration. Depending on the amounts at stake, these
procedures require prior approval by Executive Management, the
Strategic Committee and/or the Board of Directors (see chapter 3,
section 3.1 of the Registration Document).
❚ ENERGY PRICES
(See Note 25.5 to the consolidated financial statements)
❚ COUNTRY
Because of their mining activity and the variety of their end markets,
the Group’s activities are now present in many countries, several of
which represent a strategic interest for the Group. Future changes in
the environmental, social, legal or regulatory policy of some countries,
particularly emerging countries (such as South Africa, Brazil, China
and India) could affect the Group’s assets, cash flows, profitability
and ability to continue operating and developing in such countries.
To identify at-risk countries, Imerys uses the @rating classification
by Coface, the primary French insurance firm specializing in export
credit insurance. This rating is used to measure the degree to which
an entity’s economic and financial commitments are exposed in the
countries in question (for more information on these ratings, see
Note 31 to the consolidated financial statements).
In parallel, Imerys develops its relations with local authorities and
communities in those countries in order to create and maintain
mutual trust based on periodical and transparent dialog on the
Group’s activities and methods. Moreover, these relations must
help the Group to anticipate major local changes that could have
an impact on its activities.
Finally, Imerys has initiated a procedure for periodically monitoring
the Group’s performance in certain countries (particularly China and
India), as well as a review of the Group’s exposure to certain country
risks. An overview of these items is examined by the Executive
Committee and should be presented to the Audit Committee in 2011.
❚ PENSION SCHEMES
(See Notes 4.19, 8, 12 and 24.1 to the consolidated financial
statements)
❚ HUMAN RESOURCES
The management and development of the Group’s activities require
the employment and recruitment of a large number of highly qualified
technicians and managers. The success of the Group’s internal and
external development plans depends partly on its ability to retain
its employees, to recruit and integrate new skills, especially in the
most remote geographic zones, and to train and promote new talent.
That is why Imerys has drawn up a human resources policy with
the aim of attracting, retaining and renewing expertises, talents and
skills needed to carry out its activities worldwide and to support its
internal and external growth. This policy is presented in chapter 1,
paragraph 1.9.5 of the Registration Document.
❚ RAW MATERIALS
Raw materials account for approximately 18.7% of the Group’s
current operating expenses in 2010. Trends in the cost of those
materials and their supply conditions may, therefore, affect its
operating margin.
In that context, the Group’s strategy is to integrate, whenever
economically and technically possible, the ownership or exploitation
of the mineral resources needed to carry out its activities (see the
Group’s portfolio of ores presented in chapter 1, section 1.3 of the
Registration Document). For other critical raw materials, supplies
are secured through long-term contracts and/or suppliers diversity.
Thus, in 2010, purchases from Imerys’ 10 largest suppliers (including
transport and energy) represent 10.35% of the Group’s total
purchases, with no supplier accounting individually for more than
2% of total purchases.
A policy of systematic analysis of purchasing risks has been
developed to control those supplies. In that context, the supplier
qualification system (SQS), which is intended to keep supply risks to
a minimum and qualify suppliers, was begun in 2008. Furthermore,
the Group henceforth seeks to appoint purchasing managers by
purchasing category in order to specialize buyers and to enable them
to negotiate better purchasing terms.
❚ CUSTOMER CREDIT RISKS
(See Note 22.4 to the consolidated financial statements)
The level of customer credit risk is relatively limited thanks to the
diversity of the Group’s activities and geographic bases and to the
high number and dispersal of its customers. In 2010, sales to Imerys’
10 biggest customers represent 15.33% of the Group’s sales, with
none of them individually totaling 3%. Consequently, the Group does
not estimate at present that it has any significant risk of dependence
with respect to its customers.
Furthermore, trade receivables are closely monitored internally in
every activity and credit insurance is set up in Europe according to
the activity’s specific circumstances.
The recent economic crisis, which increased the credit risk of
some Group customers, did not reveal any situations where the
default of several significant customers, even simultaneously, could
have a major combined effect on the Group’s results and financial
situation. The total amount of provisions booked for the depreciation
of trade receivables is €27.4 million (i.e. 5.8% of the amount of trade
receivables) as on December 31, 2010, compared with €37.8 million
(i.e. 9.4% of the amount of trade receivables) as on December 31,
2009.
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RISK FACTORS AND INTERNAL CONTROL 4Risk factors
4.1.2 INDUSTRIAL AND ENVIRONMENTAL RISKS
❚ INDUSTRIAL OPERATIONS AND BUSINESS CONTINUITY
As for any industrial group, Imerys’ production sites are exposed to
the occurrence of unforeseen incidents (of various nature or origin,
e.g. accidents, natural disasters, machine breakage) that may lead
to temporary operating stoppages, some of which may significantly
affect the activity of the operating sites concerned.
The risk of occurrence of such events and their possible impact
on the Group’s overall business are limited by the following set of
factors and measures: the number and geographic dispersal of
industrial sites, many of which are of moderate size, in each operating
activity; regular capital expenditure committed by each activity to
modernize and maintain its industrial assets; an active industrial risk
prevention policy set up by the Group, including the definition of
business continuity plans and/or crisis management plans for the
most strategic sites and a dam soundness review program for the
relevant sites.
Furthermore, the potential financial impact that may arise from
property damages or sites’ temporary operating stoppages is
covered through an insurer that is internationally recognized for
its reputation and financial solidity under an insurance coverage
program combined with a sound risk prevention program (see
paragraph 4.1.5 of the present chapter).
The General Counsel presents the Group’s policy on insurance,
risk coverage and the related prevention programs to the Audit
Committee as part of its annual examination of the risks facing the
Group.
❚ ENVIRONMENT, HEALTH & SAFETY
Most of the industrial mining and minerals conversion activities that
make up Imerys’ core business may have an impact, albeit a limited
one, on their environment. Moreover, these activities require the daily
performance of tasks that entail risks and, consequently, require
relevant employee training, particularly in the use of explosives,
driving heavy mobile equipment and work at heights.
Therefore, Imerys books provisions to cover environmental risks
resulting from the Group’s industrial activity and for the restoration
of mining sites at the end of their operating lives. These provisions
amount to €123.9 million as on December 31, 2010 (€92.7 million as
on December 31, 2009).
Imerys has a central Environment, Health & Safety (EHS) Function
with the mission of guiding and assisting operating activities and
the Group in their efforts to develop and uphold an adequate level
of protection of people (Imerys employees or external personnel),
property and the environment.
As part of its mission, the EHS Function audits the programs
implemented by operating activities in order to check their
compliance with local regulations and with Imerys’ internal safety,
health and environmental standards, whenever these are more
stringent. Approximately 35 to 40 audits per year are conducted in
order to check all the Group’s largest sites every three years.
The EHS Function delivers an in-house training program. Since
2005, “Imerys Safety Universities” have trained participants in work
risk assessment and fostered the improvement of safety culture.
The University courses contribute to the sharing of experience in
the Group and help to form strong, dynamic internal networks for
safety. Moreover, since 2009, monthly webinars have been organized
to enhance training on precise topics related to safety or the
environment. In 2010, the focus was on the setup of environmental
management systems and specific training seminars (environmental
aspects and impacts; audits) were held throughout the year.
The Executive Committee periodically examines EHS performance
indicators and the results of audits in the different activities. Moreover,
the Audit Committee reviews the processes and resources used to
achieve the defined goals. The Board of Directors is given an overall
presentation of those items at least once a year.
This information is given in detail in chapter 1, section 1.9 of the
Registration Document.
4.1.3 LEGAL RISKS
❚ ADMINISTRATIVE AUTHORIZATIONS
The availability of the Group’s mineral reserves and resources is an
essential factor in the continuity of its operations. Those operations
require the obtaining, maintaining and renewal of administrative
authorizations and permits, particularly operating permits. If those
authorizations or permits were not obtained or renewed or if they
were renewed on less favorable terms than the initial terms, the
situation could have in some conditions (the most significant sites
affected and/or several sites affected significantly) an adverse effect
on the Group’s operations, results or financial situation.
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Risk factors
Consequently, the Group’s activities organize a strict monitoring
of those administrative authorizations and operating permits, and
procedures are set up to prepare satisfactorily for any measures to
be taken to obtain or renew the various authorizations and permits.
To the best of Imerys’ knowledge, no particular significant risk exists
on this issue as on the date hereof.
❚ COMPLIANCE WITH AND/OR CHANGES IN LAWS AND REGULATIONS
The Group’s companies have to deal with a great number of
national and regional laws and regulations, given the nature of their
operations (particularly mining of natural resources) and their diverse
locations (245 industrial sites in 47 countries as at year-end 2010).
Consequently, the Group must verify that it is able to comply with
those regulations as well as possible in order to continue running
all its operations and enable them to maintain an acceptable level
of profitability.
Chiefly in emerging countries, foreign companies, especially those
that exploit local natural resources, may be affected by the adoption
of discriminatory legislative or regulatory texts or by their interpretation
by the authorities in charge of their application. Furthermore, the
legislative and regulatory framework is generally becoming tighter
with respect to the protection of the environment, health and safety.
The costs entailed in bringing the Group’s activities into compliance
with those laws, regulations or interpretations, the penalties that
may be imposed in the event of non-compliance and the resulting
possible damage to the Group’s reputation may have a negative
impact on the economic conditions of the Group’s operations and
the competitiveness of its activities.
To ensure its operations’ optimal compliance with all applicable
legislation and regulations, Imerys has set up a network of internal
lawyers assigned to the Legal Function, some of whom are based at
operations or in the Group’s main geographic zones. Furthermore,
in many countries, Imerys develops close relations with regulatory
bodies, trade associations, local authorities and communities in order
to better anticipate or orientate, whenever possible, the planned
legislative and regulatory changes that may have an impact on the
Group’s activities. Finally, the Group tries to anticipate those changes
and factor them into its research and development programs in order
to be able to rapidly meet the requirements of new regulations in a
timely manner, while limiting its costs, and/or to use those changes
as commercial opportunities for the Group.
To the best of Imerys’ knowledge, no particular significant risk exists
on this issue as on the date hereof.
❚ LEGAL PROCEDURES
(See Note 24.2 to the consolidated financial statements)
The Group is exposed to the risk of actions and claims arising from
the ordinary course of its business. The most common claims or
actions concern allegations of personal injury or financial loss calling
on the liability of Group companies with respect to: the pursuit of
their commercial or industrial activities (particularly claims by
customers concerning the delivery of defective products – in most
cases covered by Group insurance programs – or by third parties
concerning neighbourhood disturbances); the possible breach of
certain contractual obligations; the failure to comply with certain legal
or statutory provisions that apply in social, property or environmental
matters.
Furthermore, Imerys is also bound by certain contractual obligations
of compensation – or enjoys certain rights to compensation – with
respect to guarantees of liabilities made for past divestments – or
acquisitions – of assets.
Imerys Legal Function manages all claims involving the Group, with
the assistance of local lawyers whom it appoints. An overview of the
most significant claims is reviewed with the Finance Function and
Group Auditors after every half-year. The General Counsel makes a
summary presentation of claims to the Audit Committee as part of
its annual examination of the risks facing the Group.
Although the outcome of all outstanding actions and claims cannot
be foreseen with certainty, taken individually or as a whole, their
settlement, even if adverse for the Group companies involved, is not
likely to have any material impact on the Company or Group’s financial
statements. The amount of provisions booked for management
risks is €32.3 million as of December 31, 2010 (€38.6 million as
of December 31, 2009) and the amount of provisions booked for
legal and social litigations is €47.8 million as of December 31, 2010
(€45.0 million as of December 31, 2009). The likely term of these
provisions is from 2011 to 2015.
More generally, as of the date of the present Registration Document,
to the best of Imerys’ knowledge, no governmental, legal or arbitration
proceedings are likely to affect significantly the Group’s business,
financial position or cash flow.
❚ MAJOR CONTRACTS
To the best of Imerys’ knowledge, apart from the contracts entered
into (i) in the ordinary course of business, including contracts with
respect to operating rights for mineral reserves and resources, and
(ii) in relation to the business acquisition or divestment operations
or the financing operations mentioned in the present Registration
Document, no other major contracts have been signed by any
Group company in the two years prior to the date of the present
Registration Document that are still in force on that date and which
contain provisions entailing an obligation or commitment likely to
have significant impact on the Group’s business, financial position
or cash flow.
However, with respect to some contracts, significant commitments
and guarantees have been granted by Imerys or its subsidiaries. The
amount of off-balance sheet commitments made is €540.9 million
as on December 31, 2010, compared with €544.3 million as on
December 31, 2009 (see Note 30 to the consolidated financial
statements).
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RISK FACTORS AND INTERNAL CONTROL 4Risk factors
4.1.4 RISKS RELATING TO FINANCIAL MARKETS
(See Notes 22.4 and 25.5 to the consolidated financial statements)
4.1.5 RISK INSURANCE AND COVERAGE
The Group’s policy with regard to the protection of its earnings and
assets against identifiable risks is to seek the most suitable solutions
on the insurance market that offer the best balance between their
cost and the extent of the coverage provided.
The coverage of major risks that are common to all operating
activities is almost exclusively integrated into “All Risks Except”-type
international Group insurance programs taken out on the market with
insurers that are internationally recognized for their reputation and
financial solidity. This integration enables the Group to benefit from
the most extensive coverage with the highest limits while optimizing
its cost. As part of the active external growth policy implemented by
the Group, steps are taken to ensure that acquired businesses are
immediately integrated into existing Group insurance programs or
benefit from coverage terms that are at least equivalent. In the latter
case, integration is restricted to the additional coverage offered by
Group programs compared with the local insurance policies that
apply to the acquired activities.
The Group’s companies also use the local market to cover the
specific risks of some of their non-recurring activities or operations
through the services of the brokers in charge of managing the
Group’s insurance programs, or when such insurance is made
compulsory by applicable local regulations.
The Group judges that it currently benefits from sufficient insurance
coverage, in terms of both scope and insured amounts or limits
of guarantees, for the principal risks related to the pursuit of its
businesses worldwide.
The two main Group insurance programs cover civil liability as well
as property damage and business interruption.
❚ CIVIL LIABILITY
The purpose of this program is to cover the Group’s liability in the
event of bodily injury, property damage or consequential damage
occurring during operations or after the delivery of products, and
any damage resulting from accidental pollution.
The Group’s activities are first covered by local policies issued in
each country (“1st layer”), then by a Master policy issued in France
and an additional policy in excess of the limit of cover of the Master
policy (“Excess”). The “Master” policy is taken out with XL Insurance
Company Ltd UK (rated A by AM Best and Standard & Poors) and
the “Excess” policy with AXA Corporate Solutions (rated NR-5 by
AM Best and AA- by Standard & Poors).
Those “Master” and “Excess” policies are also used in addition to
the limits and coverage of several specific sub-programs, particularly
in North America, to cover Automobile Civil Liabilities and Workers’
Compensation, and in addition to the mandatory Employer’s Liability
policy issued in Great Britain.
The coverage provided by the Group Civil Liability program, subject
to the exclusions that are common practice on the insurance market
for this type of risk and to sub-limits applied to certain defined events,
amounts to €100 million per claim and per year.
The current Group Civil Liability program is renewable on
December 31, 2012. Apart from exceptions, applicable standard
deductibles are €15,000 euros per claim but may amount to 10%
of the claim (with a ceiling of €200,000 per claim) for claims over
€150,000, outside Canada and the United States where they amount
to US$ 100,000 and US$ 250,000 respectively.
❚ PROPERTY DAMAGE AND BUSINESS INTERRUPTION
This program is particularly intended to cover property damage
caused suddenly and directly, affecting the insured property as well
as any resulting operating losses.
The Group’s activities are covered for property damage and business
interruption under a Master policy that is issued in France and applies
directly in most European countries and in addition to local policies
in other countries, when regulations allow.
The overall trend among insurers of tightening their terms and
conditions for major industrial risk coverage led Imerys to transfer
only risks of intensity to insurers as of January 1, 2002. Frequency
risks are retained in captive reinsurance that is consolidated in the
Group’s accounts, for maximum amounts of €700,000 per claim and
€2 million in total per year.
The Master policy provides the Group, subject to the exclusions that
are common practice on the insurance market for this type of risk and
the sub-limits applied to certain defined events, with coverage for
property damage and business interruption of €200 million per claim.
The current Group property damage and business interruption
program, taken out with FM Insurance Company Limited (rated A+ by
AM Best and AA by Fitch) will be renewed on its due date, scheduled
for December 31, 2012.
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Internal control
The enhanced risk prevention policy implemented by the Group
has enabled it since 2004 to negotiate lower premium rates. In
assigning its property damage and business interruption program
to an insurance firm that is renowned for its expertise in prevention
engineering, Imerys intends to continue its extensive efforts on
risk awareness and protection in its activities in line with its overall
Sustainable Development program. Almost all the Group’s industrial
sites are regularly inspected by prevention engineers, giving rise to
recommendations that enable Imerys to improve its industrial risk
management. More than 100 sites were inspected in 2010. Since
2007, awareness seminars on industrial risks (fire, electrical risks, hot
works, etc…), facilitated by FM Global’s prevention engineers, have
been organized in the Group.
❚ OTHER GROUP-WIDE INSURED RISKS
The Group’s other main insurance programs are intended to cover
the following risks, which are common to all its legal entities or several
of its activities: company officers’ liability; motor fleet insurance
(Europe and United States); marine cargo and charterer’s liability;
workers’ compensation and employers’ liability (particularly in the
United States and Great Britain).
4.2 | INTERNAL CONTROL
4.2.1 REPORT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS
❚ INTRODUCTION
Context
Pursuant to article L. 225-37 of the French Code of Commerce, as
amended by the law on financial security of August 1, 2003 (the
“LSF law”), then by the laws of December 30, 2006 and July 3,
2008, the Chairman of the Board of Directors drew up his report
on the composition of the Board, the conditions for preparing and
organizing its work and on the risk management and internal control
procedures set up by Imerys, on February 15, 2011.
Detailed information on the conditions for preparing and organizing
the Board of Directors’ work and, more generally, its composition
and functioning, and the limits placed in the powers of the Chief
Executive Officer by the Board, is given in chapter 3, section 3.1 of
the Registration Document. The principles and rules set down by
the Board of Directors to determine the compensation and benefits
of any kind granted to corporate officers are given in chapter 3,
section 3.3 of the Registration Document. As the case may be,
this information comes with a note explaining why the Group does
not implement certain provisions of the AFEP-MEDEF Corporate
Governance Code, which the Board of Directors states that it uses
as a reference. Moreover, the information described in Article L. 225-
100-3 of the French Code of Commerce likely to have an impact in
the event of a public offering and the particular arrangements for
the participation of shareholders in the Annual General Meeting is
presented in chapter 6, section 6.1 of the Registration Document.
All this information should be considered as an integral part of the
above-mentioned Report of the Chairman of the Board of Directors.
The part of the report presented below describes in more detail the
main internal control and risk management procedures implemented
by the Group. This part was drawn up under the responsibility of
the Group Risk and Internal Control Department and reviewed by
Executive Management who confirmed that its content was valid.
The report was then provided in full to the Statutory Auditors for
discussion and to the Audit Committee for review prior to its definitive
approval by the Board of Directors.
Internal control objectives
To define its internal control reference matrix and structure its
approach, the Group draws on the framework and the application
guide published in January 2007 by the AMF (the French Securities
Regulator) and updated in July 2010. That matrix includes the
objectives and the components of the AMF framework.
The Imerys group’s internal control system covers all controlled
companies in the Group’s scope of consolidation.
By implementing this system in all its activities, Imerys intends to
ensure that it has the resources needed to manage the risks that
its activities face, guarantee the accuracy and thoroughness of its
financial information and organize the proper management of its
operations in accordance with the laws and regulations in force and
the Group’s management principles and strategy. In this way, the
internal control system helps to protect the Company’s value for its
shareholders and employees and enables the Group to achieve the
goals it sets itself.
However, by its nature, such a system cannot provide an absolute
guarantee as to the total control of the risks that the Group faces
and the achievement of its goals.
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RISK FACTORS AND INTERNAL CONTROL 4Internal control
Internal control principles
In line with the goals set, Imerys’ internal control system is founded
on the following principles:
p a chosen, controlled organization comprised of skil led,
responsible men and women;
p targeted internal communications;
p a regular analysis of the Group’s main risks;
p relevant control activities;
p a regular review of internal control practices in the Group.
❚ A CHOSEN, CONTROLLED ORGANIZATION
Organizational model
Imerys’ internal control is based on the Group’s operating and
management organization and on support Functions that are directly
or indirectly dedicated to the control of the risks that the Group faces.
The control system set up in the Group is founded on a tight
governance structure that guarantees the transparency and
traceability of decisions, while conserving the principles of
subsidiarity and decentralization that are considered as essential
to the running of the Group’s industrial and commercial activities. It
requires great commitment from every line or support manager as
they are expected to grasp the policies and procedures defined at
Group level, contribute to their implementation and observance and
enrich them through relevant measures for the activities or fields
under their charge.
The framework for managing operations consists, on the one hand,
of Group policies and the resulting delegations of authority to line
managers and, on the other hand, of specific controls carried out
by the central support Functions in their scope of responsibility,
regular audits conducted by the Internal Audit Department and
self-assessments conducted at least once every three years by the
managers of the main entities under the control of the Risk and
Internal Control Department. Furthermore, operating management
is constantly controlled and monitored by line managers and
periodically by Executive Management and the Chief Financial Officer
through budget processes, quarterly income reviews and monthly
management reporting, of which the main items and findings are
commented on at the Executive Committee’s monthly meetings. The
consolidated financial statements are also reviewed by the Board of
Directors and, for semi-annual and annual statements, approved by
the Board of Directors after examination by the Audit Committee.
The longer-term orientations of each activity and the resulting financial
forecasts are formalized and monitored under a multiyear strategic
plan. This plan is drawn up under the control and supervision of
Executive Management and its conclusions are reviewed by the
Executive Committee before being presented to the Strategic
Committee then, for approval, to the Board of Directors.
Participants in internal control
The Board of Directors and its specialized Committees
The Board of Directors constantly controls the management of the
Group conducted by the Executive Management. In that framework,
it particularly makes sure that internal control mechanisms are set
up correctly in the Group.
To assist the Board in its mission, three specialized Committees were
formed from its members: the Strategic Committee, the Appointment
and Compensation Committee and the Audit Committee. The
Strategic Committee and the Audit Committee have responsibilities
with respect to identifying and managing risks and monitoring certain
internal control mechanisms as presented in chapter 3, section 3.1
of the Registration Document. In particular, the Audit Committee
reviews at least once a year the processes set up and results
obtained in terms of risks analysis and appraisal of internal control
mechanisms.
These specialized Committees perform their duties under the
responsibility of the Board of Directors.
Executive Management and the Executive Committee
Executive Management has operating and functional responsibility
covering all the Group’s activities to implement the strategy defined
by the Board of Directors. In particular, they are in charge of the
effective implementation of internal control mechanisms within the
Group.
Executive Management is assisted in its mission by an Executive
Committee of which the Chief Executive Officer appoints the
members. The members represent each of Imerys’ activities and
main support Functions. By delegation, Executive Committee
members are in charge of setting up and monitoring internal control
systems in their scope of responsibility.
Operating management
In accordance with the Group’s decentralized operating principles,
the managers of each activity have the responsibility and necessary
powers to organize, run and manage the operations in their charge,
and to delegate in similar conditions to the managers reporting to
them.
Each activity favours the most appropriate organization to its markets,
taking into account their commercial, industrial or geographic
specificities. It is, therefore, responsible for adopting internal
control mechanisms that are consistent, on the one hand, with its
organization and, on the other hand, with the Group’s principles
and rules.
The Group’s support Functions
The corporate Finance, Strategy, Legal & Corporate Support,
Human Resources, Innovation, Research & Technology & Business
Support, Geology and Environment, Health & Safety Functions have
a twofold mission: organize and control the Group’s operations
in their respective spheres of expertise and provide technical
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Internal control
assistance to operating activities in those fields when necessary. This
central support core, together with the cross-Group Departments
(Purchasing and Information Systems), enables the Group not
only to benefit from the scale effects related to its size and from
better sharing of skills, but also to ensure that all the operations in
those fields are carried out in a framework of secure, consistent
management and control.
Through their presence and organization, central support Functions
make a significant contribution to the Group’s internal control
mechanisms. The managers of these functions have functional
authority over the managers whose missions come under their scope
of expertise in operating activities.
Internal Audit Function
The Internal Audit Function is a management support function and is
independent of the operating and functional activities that it audits.
For that purpose, the Internal Audit Manager reports hierarchically to
the Executive Management and functionally to the Audit Committee.
The Internal Audit Function’s mission is to check the Group’s internal
control mechanisms and make sure that they comply with the
principles and rules governing them. It must alert management of
any internal control failings and issues recommendations to correct
such failings.
The Function has a centralized organization with a team of 5 auditors
based in Paris (covering Europe, Africa and the Americas) and 3
auditors in Shanghai (covering Asia-Pacific and all information
systems).
Risk and Internal Control Department
The Risk and Internal Control Department reports to the Legal &
Corporate Support Function and works closely with the Internal Audit
Function, the Group’s other support Functions and the main line
managers for each activity.
In carrying out his or her missions, the Department Manager is
supported by the network of local financial controllers. The goal
of those missions is to coordinate the continuous improvement of
internal control mechanisms in the Group. They are organized around
three activities: risk analysis; administration of Group’s policies and
procedures (including their Group-wide dissemination); overall review
of internal control practices in the Group.
Framework
Group’s rules
Imerys’ internal control policy is set down in a number of charters
(Board of Directors Charter, Sustainable Development Charter,
Environment, Health & Safety Charter, Internal Audit Charter) and
codes (Code of Business Conduct and Ethics, Corporate Governance
policy) that apply Group-wide. These sets of rules are intended to
create a favourable control environment, based on robust principles
and the experienced practice of Corporate Governance, as well as
on upright, ethical behaviour in compliance with laws, regulations
and the Group’s strategic objectives.
Furthermore, Group’s policies have been defined by central support
Functions and Departments and define the specific organization,
responsibilities, working principles and reporting for the respective
areas of expertise for which they are responsible.
Finally, the Group’s internal control manual defines the main internal
control principles and the principal control activities to be carried
out with respect to the Group’s operating and financial processes.
The Group’s charts, policies and manuals are grouped together in
the “Blue Book”, which all employees can consult online via intranet.
This initial set of rules forms the reference framework by which the
Group’s operating activities must abide. It applies to all the Group’s
companies and activities.
In operating activities, a second set of rules, if needed, define
specific working and reporting principles. These arrangements are,
in compliance with Group policies, adapted to their own internal
organization, the management of their specific mining, industrial and
commercial activities and to the particular related risks. They take into
account specificities in terms of local laws and regulations.
Code of Business Conduct and Ethics
The Imerys Code of Business Conduct and Ethics summarizes the
ethical behaviour principles the Group expects all its employees,
especially its senior managers, as well as its contractors, suppliers
and other partners with whom they have close relations to follow.
It is designed so that everyone, in his or her daily work, adopts
an attitude that complies with local legislation and abides by the
principles of responsibility, integrity, fairness and openness that are
the Group’s values.
The Imerys Code of Business Conduct and Ethics particularly defines
the rules of conduct to follow in terms of: protecting the environment
and human rights; relations with local communities and the treatment
of differences; employee safety; confidentiality rules; prevention of
insider trading, conflicts of interest, illicit payments and practices;
protection of the Group’s assets and fair competition.
Details of some of these subjects are given in other Group policies in
addition to the Code of Business Conduct and Ethics: the anti-fraud
policy, the child labour and forced labour protocols, the anti-trust
policy and the employee relations policy.
Major efforts are made in internal communications. The Code of
Business Conduct and Ethics is presented at in-house seminars,
regularly featured in articles in the internal magazine and was the
subject of a specific Group communication campaign in 2009.
Moreover, online training, initially created in the United States, is
regularly followed by all American employees and at least once by
all main managers elsewhere in the Group. As at the end of 2010,
approximately 1,900 employees have thus been trained on the
Group’s Code of Business Conduct and Ethics.
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Finally, the Group’s general compliance program (including,
in particular, the prevention of fraud and corruption risks and
compliance with competition law regulations) is in the review process.
New actions, particularly on Group personnel training, should be
undertaken from 2011. In late 2010, the Group set up a simplified
reporting process that enables Group division managers to report
any breaches of the Code of Business Conduct and Ethics of which
they may be aware, particularly in terms of fraud, corruption or
violation of human rights, with respect to 2010.
Information systems
The effectiveness of information systems and tools contributes to
the reliability and improvement of support and operating processes.
The Group’s policy consists of integrating as much as possible its
value chain (particularly sales, distribution, purchasing, inventory,
fixed assets, production, the logistics chain and finance) via its
computerized enterprise resource planning (ERP) tools. Imerys strives
to use integrated ERP control systems in order to ensure the optimum
level of control while meeting the specific requirements of better
management of its operating activities. This use is regularly checked
by the Internal Audit Function through specialized information system
assignments.
Imerys is organized around a small number of ERP systems
selected by the Group in which they are to be deployed in order to
achieve support and maintenance synergies as well as satisfactory
consistency, but also to allow for the size of operations and
geographic zones where they are to be rolled out.
For the consolidation and reporting of its accounting and financial
information, the Group uses a single software package in all its
entities.
Furthermore, tools for consolidating and monitoring the most
important non-financial data have been set up Group-wide.
Depending on the case, they are used to achieve the following goals:
p obtaining better vision of the performance of the Group’s different
activities, preventing or solving any difficulties and fostering or
measuring improvement (e.g. consolidation and reporting of
representative indicators for managing human resources and
environment, health or safety);
p ensuring accurate management of some data and contributing
to the monitoring of the data’s compliance with the legal or
regulatory obligations that apply to the Group and with Group
rules (e.g. consolidation and reporting of legal and administrative
information on the Group’s subsidiaries and interests and their
company officers; management of intra-group bank accounts
and cash flows).
Human Resources management principles
Human Resources management contributes to Imerys’ internal
control system by enabling the Group to ensure that its employees
have a relevant skill level with respect to their responsibilities, that
they are aware of those responsibilities and that they are informed
about and observe the Group’s rules.
In that respect, a set of rules has been drawn up to ensure that
the decisions taken comply with applicable international laws and
agreements, control the integrity of salary determination and payment
processes, supervise the setup of benefits and gather and process
information. Other Human Resources policies have been drawn
up covering areas such as employee relations, industrial relations,
career development, international mobility and crisis management.
Review and updating work on the Human Resources policies and
procedures that define these rules began in 2010. Full documentation
should be available in 2011.
Recruitment and development
To support its growth, the Group recruits in every country and every
function. To make sure that recruitments are consistent and relevant,
the Human Resources Function defines standards and periodically
verifies the quality of practices. In addition, senior managers may
not be recruited without the involvement of the Human Resources
Function and, as the case may be, the relevant support Functions.
There are two parts to the career development procedure:
Performance Appraisal and Career Development (P.A.D.), through
which individual goals are set and annual assessments carried out,
and Organization and People Review (O.P.R.), a framework that
allows the activities to examine annually individual situations (e.g.
identifying high-potentials or outstanding performance), succession
plans and key organizational questions which are then reviewed by
the Executive Committee.
Compensation
Compensations are reviewed annually. The review particularly
focuses on base salary and individual bonuses. Compensations are
revised according to a global policy intended to improve Group-wide
competitiveness, consistency and evolution. Revision is based on
an international classification of the main line and support manager
positions at Imerys. Furthermore, the bonus practices in force
in the Group are now consistent and are based, in particular, on
comparable criteria in terms of value and kind. The Appointment and
Compensation Committee is informed of the global compensation
policy and the measures taken for major Group executives.
❚ TARGETED INTERNAL COMMUNICATIONS
Internal communication is organized around a central department
that is part of the Group Human Resources Function and a network
of local correspondents in operating activities. Its mission is to
supervise the integration of each of the Group’s activities and build
a collective identity founded on its diversity.
121IMERYS 2010 REGISTRATION DOCUMENT
RISK FACTORS AND INTERNAL CONTROL
4
Internal control
The objective is threefold:
p inform all the Group’s employees;
p share experience in order to foster the dissemination of best
practices, including internal control mechanisms;
p listen to personnel, especially in operating activities, through the
local correspondent network.
To achieve these goals, the Group has several communication tools.
The in-house newsletter “Imerys News” or the intranet “Imerysnet”
set out Imerys’ general orientations, strategy, organization, activities
and projects. Other tools, for example the intranet “Blue Book” or
intranets on specific topics managed by support departments, are
used to disseminate Group policies and procedures. Moreover,
Imerys strives to give all recruited managers an overview of the
Group, including its organization, core businesses and strategy. The
welcome sessions organized every year for around 100 new arrivals
in each of the Group’s main geographic zones (Europe, Asia, USA)
contribute to this effort.
Finally, in addition to the training programs organized by the activities,
Group training sessions are organized by the Imerys Learning Center
(see chapter 1, paragraph 1.9.5 of the Registration Document). These
sessions enable employees to enhance their professional expertise
(e.g. finance, geology, marketing, project management…) and foster
the sharing of best practices.
❚ PERIODICAL ANALYSIS OF THE GROUP’S MAIN RISKS
Objectives
Analyzing risks enables Imerys to identify the events that, if they
occurred, could represent a major threat with respect to the
achievement of its strategic and financial goals and its compliance
with local laws and regulations.
Through a structured process designed to enable the Group to
appraise and analyze its main risks, Imerys can assess the suitability
of its existing internal control mechanisms, set up relevant action
plans to improve their efficiency and, more generally, increase the
protection of the Group’s value in compliance with applicable laws
and regulations.
Organization
A two-level risk analysis process is organized:
p with respect to his or her duties, every support and line manager
must constantly seek to identify, analyze and manage risks in his
or her areas of responsibility. The identification and management
of these risks are periodically reviewed and discussed by
Executive Management and the Chief Financial Officer as part
of the budget process, quarterly income statement reviews and
monthly management reporting;
p furthermore, the Group has undertaken a formal, recurrent
process to analyze its main risks by drawing up a map which
shows the potential impact of identified risks and the extent to
which they are controlled. This process was initiated from 2003
on the level of the Executive Committee and the main line and
support managers, then extended to each activity in 2006, the
level considered as most relevant to Imerys’ management and
operating structure. Results are reviewed and approved by
the Group’s Executive Committee and presented to the Audit
Committee. In view of the results, new actions are defined to
tighten the Group’s control of certain identified risks. This risk
mapping is now regularly updated on the basis of a review by the
Group’s support function managers and/or main line managers.
Imerys’ Board of Directors supervises the Group’s risk analysis
process. The Board has appointed two of its specialized Committees,
the Strategic Committee and the Audit Committee, to examine
questions relating to the Executive Management’s analysis and
monitoring of the major risks that come under their respective areas
of competence. The Committees regularly report to the Board on the
work done on that subject and on the obtained results.
Major risks
The nature of the Group’s main risks and their management and
control methods are detailed in section 4.1 of the present chapter.
❚ RELEVANT CONTROL ACTIVITIES
Operating and support control activities
Control activities are carried out to ensure that the risks related to a
given operating or support process are correctly covered. They are
adapted to the goals set by the Group.
Group policies (see “Organization” part above) are rules that structure
the Group’s control environment. The resulting Group procedures,
particularly those relating to the accuracy of accounting and financial
information, describe the required control activities in detail.
Control activities concerning the accuracy of accounting and financial information
The control mechanism and the procedures for the production of
the accounting and financial information are uniform throughout the
Group. This mechanism is made up of a cross-Group accounting
organization, consistent accounting standards, a single consolidated
reporting system and a quality control of the internal and external
financial and accounting information that is produced.
122 2010 REGISTRATION DOCUMENT IMERYS
RISK FACTORS AND INTERNAL CONTROL 4Internal control
Organization of the accounting and financial department
Accounting and financial operations are managed by the Group
Finance Function. Its central organization includes:
p an accounting and consolidation department, which is responsible
for the preparation and presentation of Imerys’ statutory financial
statements and the Group’s consolidated financial statements;
p a financial control and budget control department, which prepares
and compiles budget and monthly management reporting data
and analyzes operations’ performance in relation to budget
targets and to comparable periods during the previous year;
p a treasury and financing department, which is particularly in
charge of preparing and consolidating data on financial debt
and on the Group’s financial income/expense. Its main missions
concern the centralized management and optimization of the
Group’s debt and financial resources and management of interest
rate and liquidity and currency risk;
p a tax department, which is particularly responsible for monitoring
the tax consolidations made in the Group, estimating the resulting
amount of taxes and controlling their overall consistency.
Because of the decentralized organization of accounting and financial
functions, the financial controller of each activity has a key role. In
particular, he or she is in charge of making sure that accounting and
financial framework and internal control procedures are correctly
applied in the activities for his or her scope of responsibility. Each
controller is assigned to the manager of the operating entity in
question, but also reports on a functional basis to the Group Finance
Function.
Accounting framework
The general rules described in the “Blue Book” apply to all the
Group’s operating and legal entities. In compliance with the IFRS
standards adopted within the European Union, they include:
p a reminder of the general accounting pr inciples and
recommendations to comply with;
p a detailed chart of accounts;
p a definition of the Group’s accounting methods that apply for the
most important items and/or operations.
These documents are regularly updated with every amendment or
application of new accounting standards, under the responsibility of
the Reporting and Consolidation Department and under the control
of the Statutory Auditors.
Annual budget and management reporting
Every year, Imerys implements a monthly reporting and budget
process for all the Group’s entities in order to have a running tool and
accurate and consistent information. The match between accounting
data and the management information derived from reporting is the
key control principle intended to ensure the accuracy of accounting
and financial information.
Imerys’ budget preparation procedure is based on the involvement
of crossfunctional teams in every activity and on the control of the
overall consistency of assumptions and methods by the Reporting
and Consolidation Department.
The reporting system enables the Group to accurately monitor
monthly results (income statement and cash flow) and financial data
for operating activities and to compare them with the budget and
results for the corresponding period in the previous financial year.
Local line managers comment on management indicators and the
main variations are analyzed by the Reporting and Consolidation
Department.
Consolidation process
A single accounting consolidation system handles all information
from every Group operating and legal entity.
To guarantee the quality and accuracy of its financial information,
Imerys has set up a “SAP Business Object Financial Consolidation “
unified reporting and consolidation system for both the collection of
management information and production of the consolidated financial
statements. The system is deployed in all the Group’s entities. It is
sourced from local accounting data by interface, by retrieving the
necessary data from the financial modules of entities’ ERP systems
or by manual input. The system provides for the automatic control
of certain reported and/or consolidated data.
A detailed schedule is drawn up for annual and interim (quarterly and
semi-annual) account closings.
Review of results
Every month, the Executive Committee examines the most recent
overviews resulting from management reporting, analyzes significant
variations on the previous year or the budget. It defines any corrective
actions that it judges necessary and monitors their implementation.
Furthermore, results are reviewed at the quarterly meetings in
which operating activity managers present their results to Executive
Management and the Chief Financial Officer. A summary of each of
those reviews is also presented to the Strategic Committee.
Finally, the consolidated financial statements, accounting procedures
and complex financial transactions are systematically reviewed by
Executive Management assisted by the Executive Committee. All
of these items are also reviewed by the Board of Directors which
approves them after examination by its Audit Committee.
❚ REVIEW OF INTERNAL CONTROL MECHANISMS
The review processes set up at Imerys enable the Group to regularly
check the quality and efficiency of its internal controls and to take
improvement actions if needed.
123IMERYS 2010 REGISTRATION DOCUMENT
RISK FACTORS AND INTERNAL CONTROL
4
Internal control
Beyond the constant controls made by l ine and support
management, internal controls are reviewed under two interrelated
Group processes.
Audit of entities’ internal control practices
The Internal Audit Function has a twofold mission: check internal
control mechanisms in operating entities and make sure they comply
with the principles and rules defined by the Group; cover operating
and strategic risks and issues for the Group.
Internal Audit teams inspect all operating entities in an auditing
cycle that ranges from 2 to 5 years on average, depending on how
critical and significant the entities are. The audit plan is validated
annually by the Audit Committee and may be modified according
to circumstances.
Audit reports are passed on to Executive Management and the main
support and line managers concerned. A complete report about
the Internal Audit Function’s activities is presented and discussed
every six months in an Executive Committee meeting then in an
Audit Committee meeting, attended by the Statutory Auditors. On
that occasion, a document summarizing all drafted audit reports is
handed to participants.
Overall review of the Group’s internal control systems
Imerys has undertaken a continuous process to improve the
efficiency of its internal control systems. Implementation of this
process is supervised by the Risk and Internal Control Department
and work is done in coordination with managers of the Group’s
relevant line and support organizations. This structured and formal
process is based on detailed self-assessment questionnaires. The
aim is to analyze existing internal control mechanisms, particularly
with respect to the material nature of the related risks.
This process is structured in five main stages:
p prior identification of the key operating and support processes
where the major risks are located;
p identification of critical control activities related to the risks in
those processes;
p assessment of those controls by the main process owners;
p identification of any deficiencies in internal controls;
p consolidation of the obtained results, definition and implementation
of any necessary improvement or corrective actions.
A computer tool is used to consolidate, process and provide
overviews of the information resulting from the different stages.
Twenty-nine of the Group’s main entities, which together account
for almost 65% of consolidated sales, take part in the detailed
self-assessment program of their 12 main operating and support
processes that can generate material risks for the Group (Sales,
Inventories, Purchases, Capital Expenditure, Fixed Asset
Management, Mining, Payroll, Human Resources Management,
Treasury, Tax, Closing & Consolidation, IT Security). These
assessments are now updated every two to three years according
to the selected entities and processes.
Furthermore, as of 2010, the Group’s smaller legal entities are also
covered in rotation by a self-assessment of their internal control
mechanisms, on a simplified basis better suited to their size.
Self-assessment questionnaires are completed by the concerned
responsible people and validated by the financial controllers and
general managers of the assessed activities. They are reviewed
and discussed with the Risk and Internal Control Department to
ensure that answers are consistent and assessments are relevant.
Furthermore, the results of the self-assessments are compared with
the information given in the internal audit reports in order to identify
any divergence of appreciation whenever the activities have been
audited in the 24 months prior to the self-assessment of their internal
controls.
The approach and the final results of the overall review of the Group’s
internal control systems are presented annually to the members of
the Executive Committee and to the Audit Committee.
124 2010 REGISTRATION DOCUMENT IMERYS
RISK FACTORS AND INTERNAL CONTROL 4Internal control
4.2.2 STATUTORY AUDITORS’ REPORT
Prepared in accordance with Article L. 225-235 of the French Company Law (Code de Commerce) on the report prepared by the
Chairman of the Imerys Company’s Board of Directors.
Fiscal year ended December 31, 2010
ERNST & YOUNG et Autres
41, rue Ybry
92576 Neuilly-sur-Seine Cedex
S.A.S. with variable capital
Statutory Auditor
Member of the Compagnie régionale de Versailles
Deloitte & Associés
185, avenue Charles-de-Gaulle
92524 Neuilly-sur-Seine Cedex
S.A. with share capital of €1,723,040
Statutory Auditor
Member of the Compagnie régionale de Versailles
(This is a free translation into English of the statutory auditors’ report issued in French prepared in accordance with Article L.225-235 of French Company
Law (Code de commerce) on the report prepared by the Chairman of the Board of Directors on the internal control procedures relating to the preparation and
processing of accounting and financial information issued in French and is provided solely for the convenience of English speaking users.
This report should be read in conjunction and construed in accordance with French law and the relevant professional standards applicable in France).
To the Shareholders,
In our capacity as statutory auditors of Imerys and in accordance with Article L.225-235 of French Company Law (Code de Commerce), we
hereby report on the report prepared by the Chairman of your company in accordance with Article L.225-37 of French Company Law (Code
de Commerce) for the year ended December 31, 2010.
It is the Chairman’s responsibility to prepare, and submit to the Board of Directors for approval, a report on the internal control and risk
management procedures implemented by the Company and containing the other disclosures required by Article L.225-37 of French Company
Law (Code de Commerce), particularly in terms of corporate governance.
It is our responsibility:
p to report to you on the information contained in the Chairman’s report in respect of the internal control and risk management procedures
relating to the preparation and processing of the accounting and financial information, and
p to attest that this report contains the other disclosures required by Article L.225-37 of French Company Law (Code de commerce), it being
specified that we are not responsible for verifying the fairness of these disclosures.
We conducted our work in accordance with professional standards applicable in France.
INFORMATION ON THE INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES RELATING TO THE PREPARATION AND PROCESSING OF ACCOUNTING AND FINANCIAL INFORMATION
The professional standards require that we perform the necessary procedures to assess the fairness of the information provided in the Chairman’s
report in respect of the internal control and risk management procedures relating to the preparation and processing of the accounting and
financial information. These procedures consisted mainly in:
p obtaining an understanding of the internal control procedures relating to the preparation and processing of the accounting and financial
information on which the information presented in the Chairman’s report is based and the existing documentation;
p obtaining an understanding of the work involved in the preparation of this information and the existing documentation;
p determining if any material weaknesses in the internal control procedures relating to the preparation and processing of the accounting and
financial information that we would have noted in the course of our engagement are properly disclosed in the Chairman’s report.
On the basis of our work, we have nothing to report on the information in respect of the company’s internal control and risk management
procedures relating to the preparation and processing of accounting and financial information contained in the report prepared by the Chairman
of the Board of Directors in accordance with Article L.225-37 of French Company Law (Code de Commerce).
OTHER DISCLOSURES
We hereby attest that the Chairman of the Board of Directors’ report includes the other disclosures required by Article L.225-37 of French
Company Law (Code de commerce).
Neuilly-sur-Seine, March 30, 2011
The Statutory Auditors
French original signed by
ERNST & YOUNG et Autres
François Carrega
Deloitte & Associés
Arnaud de Planta
5.1 CONSOLIDATED FINANCIAL STATEMENTS 1265.1.1 Financial statements 126
5.1.2 Reconciliation of the net fi nancial debt 132
5.1.3 Information by segments 134
5.1.4 Notes to the consolidated fi nancial statements 137
5.2 STATUTORY FINANCIAL STATEMENTS 1915.2.1 Financial statements 192
5.2.2 Notes to the statutory fi nancial statements 195
5.3 AUDIT FEES 212
5FINANCIAL
STATEMENTS
126 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
5.1 I CONSOLIDATED FINANCIAL STATEMENTS
5.1.1 FINANCIAL STATEMENTS
❚ CONSOLIDATED INCOME STATEMENT
(€ millions) Notes 2010 2009
Revenue 5 3,346.7 2,773.7
Current revenue and expenses (2,927.7) (2,524.8)
Raw materials and consumables used 6 (1,178.6) (1,026.1)
External expenses 7 (849.5) (674.9)
Staff expenses 8 (635.6) (587.1)
Taxes and duties (41.6) (42.6)
Amortization, depreciation and impairment losses (213.0) (181.4)
Other current revenue and expenses 9 (15.1) (12.6)
Share in net income of associates 20 5.7 (0.1)
Current operating income 419.0 248.9
Other operating revenue and expenses 10 (12.4) (87.1)
Gain or loss from obtaining or losing control 40.8 11.3
Other non-recurring items (53.2) (98.4)
Operating income 406.6 161.8
Net financial debt expense (57.3) (69.1)
Income from securities 11 2.7 2.2
Gross financial debt expense 11 (60.0) (71.3)
Other financial revenue and expenses (7.2) (14.3)
Other financial revenue 11 212.1 121.1
Other financial expenses 11 (219.3) (135.4)
Financial income (loss) (64.5) (83.4)
Income taxes 13 (96.8) (37.1)
Net income 245.3 41.3
Net income, Group share (1) (2) 14 240.8 41.3
Net income, share of non-controlling interests 4.5 -
(1) Net income per share
Basic net income per share (in €) 15 3.19 0.57
Diluted net income per share (in €) 15 3.19 0.57
(2) Net income from current operations, Group share 14 240.3 119.3
Basic net income from current operations per share (in €) 15 3.19 1.66
Diluted net income from current operations per share (in €) 15 3.18 1.66
Other net operating revenue and expenses, Group share 10 0.5 (78.0)
1272010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
❚ CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(€ millions) Notes 2010 2009
Net income 245.3 41.3
Cash flow hedges 12.5 54.5
Recognition in equity 25.4 18.4 41.0
Reclassification in profit or loss 25.4 (5.9) 13.5
Translation reserve 164.7 33.1
Recognition in equity 174.9 33.1
Reclassification in profit or loss (10.2) -
Income taxes 13 (7.6) (4.6)
Other comprehensive income 169.6 83.0
Total comprehensive income 414.9 124.3
Total comprehensive income, Group share 407.5 123.5
Total comprehensive income, share of non-controlling interests 7.4 0.8
128 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
❚ CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(€ millions) Notes 2010 2009
Non-current assets 2,936.9 2,740.5
Goodwill 16 950.4 897.5
Intangible assets 17 34.6 43.8
Mining assets 18 453.5 377.2
Property, plant and equipment 18 1,287.6 1,224.1
Investments in associates 20 54.4 50.0
Available-for-sale financial assets 22.2 7.4 7.5
Other financial assets 22.1 33.7 23.2
Other receivables 22.1 45.0 43.7
Derivative financial assets 25.4 24.8 17.6
Deferred tax assets 26 45.5 55.9
Current assets 1,489.9 1,190.8
Inventories 21 545.1 440.5
Trade receivables 22.1 446.5 364.4
Other receivables 22.1 128.0 110.7
Derivative financial assets 25.4 12.2 5.0
Marketable securities and other financial assets 22.1 6.0 5.6
Cash and cash equivalents 22.1 352.1 264.6
Consolidated assets 4,426.8 3,931.3
Equity, Group share 2,169.5 1,836.9
Capital 23 151.0 150.8
Premiums 338.4 339.4
Reserves 1,439.3 1,305.4
Net income, Group share 240.8 41.3
Equity, share of non-controlling interests 26.9 18.9
Equity 2,196.4 1,855.8
Non-current liabilities 1,408.4 1,388.9
Provisions for employee benefits 24.1 94.7 103.9
Other provisions 24.2 189.6 157.7
Loans and financial debts 25.2 1,016.8 1,037.7
Other debts 25.3 10.2 9.5
Derivative financial liabilities 25.4 15.3 16.5
Deferred tax liabilities 26 81.8 63.6
Current liabilities 822.0 686.6
Other provisions 24.2 14.4 18.6
Trade payables 317.1 260.7
Income taxes payable 25.1 20.6
Other debts 25.3 239.8 185.7
Derivative financial liabilities 25.4 1.4 2.9
Loans and financial debts 25.2 219.5 186.0
Bank overdrafts 25.2 4.7 12.1
Consolidated equity and liabilities 4,426.8 3,931.3
1292010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
❚ CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(€ millions)
Equity, Group shareEquity, share
of non- controlling
interests TotalCapital Premiums
Reserves Net income,
Group share Subtotal
Treasury shares
Cash flow hedges
Translation reserve
Other reserves Subtotal
Equity as of January 1, 2009 125.6 115.8 0.0 (66.7) (249.9) 1,440.3 1,123.7 161.3 1,526.4 19.9 1,546.3
Total comprehensive income - - - 53.6 28.6 - 82.2 41.3 123.5 0.8 124.3
Transactions with
shareholders 25.2 223.6 0.0 0.0 0.0 99.5 99.5 (161.3) 187.0 (1.8) 185.2
Allocation of 2008 net income - - - - - 161.3 161.3 (161.3) 0.0 - 0.0
Dividend (€1.00 per share) - - - - - (62.8) (62.8) - (62.8) (0.8) (63.6)
Capital increases 25.2 223.6 - - - - 0.0 - 248.8 0.2 249.0
Share-based payments - - - - - 6.4 6.4 - 6.4 - 6.4
Transactions with
non-controlling interests - - - - - (5.4) (5.4) - (5.4) (1.2) (6.6)
Equity as of January 1, 2010 150.8 339.4 0.0 (13.1) (221.3) 1,539.8 1,305.4 41.3 1,836.9 18.9 1,855.8
Total comprehensive income - - - 12.7 154.0 - 166.7 240.8 407.5 7.4 414.9
Transactions with
shareholders 0.2 (1.0) 0.0 0.0 0.0 (32.8) (32.8) (41.3) (74.9) 0.6 (74.3)
Allocation of 2009 net income - - - - - 41.3 41.3 (41.3) 0.0 - 0.0
Dividend (€1.00 per share) - - - - - (75.5) (75.5) - (75.5) (0.8) (76.3)
Capital increases 0.5 5.7 - - - (0.1) (0.1) - 6.1 2.4 8.5
Capital decreases (0.3) (6.7) - - - - 0.0 - (7.0) - (7.0)
Transactions on treasury shares - - (5.9) - - - (5.9) - (5.9) - (5.9)
Share-based payments - - - - - 7.6 7.6 - 7.6 - 7.6
Transactions with
non-controlling interests - - - - - (0.2) (0.2) - (0.2) (1.0) (1.2)
Equity as of
December 31, 2010 151.0 338.4 (5.9) (0.4) (67.3) 1,512.9 1,439.3 240.8 2,169.5 26.9 2,196.4
Proposed dividend
(€1.20 per share) - - - - - (90.6) (90.6) - (90.6) - (90.6)
Equity after allocation
as of January 1, 2011 151.0 338.4 (5.9) (0.4) (67.3) 1,422.3 1,348.7 240.8 2,078.9 26.9 2,105.8
130 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
❚ CONSOLIDATED STATEMENT OF CASH FLOWS
(€ millions) Notes 2010 2009
Cash flow from operating activities 406.4 520.5
Cash flow generated by current operations Appendix 1 567.4 657.3
Interests paid (62.7) (67.2)
Income taxes on current operating income and financial income (loss) (82.6) (26.1)
Dividends received from available-for-sale financial assets 0.1 0.4
Cash flow generated by other operating revenue and expenses Appendix 2 (15.8) (43.9)
Cash flow from investing activities (210.2) (115.5)
Acquisitions of intangible assets and property, plant and equipment (154.9) (138.4)
Acquisitions of investments in consolidated entities after deduction of cash acquired (69.2) (10.9)
Acquisitions of available-for-sale financial assets 0.4 -
Disposals of intangible assets and property, plant and equipment 8.6 18.8
Disposals of investments in consolidated entities after deduction of cash disposed of 1.8 14.2
Disposals of available-for-sale financial assets - 0.1
Net change in financial assets 1.0 (1.2)
Paid-in interests 2.1 1.9
Cash flow from financing activities (118.0) (365.7)
Capital increases 8.5 249.0
Capital decreases (7.1) -
Disposals (acquisitions) of treasury shares (5.9) -
Dividends paid to shareholders (75.5) (62.8)
Dividends paid to non-controlling interests (0.8) (0.8)
Loan issues 67.0 8.2
Loan repayments (32.0) (402.4)
Net change in other debts (72.2) (156.9)
Change in cash and cash equivalents 78.2 39.3
(€ millions) 2010 2009
Opening cash and cash equivalents 252.6 211.2
Change in cash and cash equivalents 78.2 39.3
Impact of changes due to changes in perimeter (0.1) (2.3)
Impact of changes due to exchange rate fluctuations 17.5 4.5
Impact of changes in accounting policies (0.8) (0.1)
Closing cash and cash equivalents 347.4 252.6
Cash and cash equivalents 352.1 264.6
Bank overdrafts (4.7) (12.1)
1312010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
Appendix 1: cash flow generated by current operations
(€ millions) Notes 2010 2009
Net income 245.3 41.3
Adjustments 373.3 367.2
Income taxes 13 96.8 37.1
Share in net income of associates 20 (5.7) 0.1
Dividends received from associates 2.0 3.8
Impairment losses on goodwill 10 & 16 1.0 7.0
Profits resulting from bargain purchases (42.8) -
Share in net income of associates out of the recurring business 20 8.8 -
Other operating revenue and expenses excluding impairment losses on goodwill 45.4 80.1
Net operating amortization and depreciation 212.0 180.4
Net operating impairment losses on assets 8.6 18.1
Net operating provisions (8.2) (24.9)
Dividends receivable from available-for-sale financial assets (0.1) (0.3)
Net interests of revenue and expenses 56.7 71.4
Non-recurring foreign exchange gain related to a financial restructuring (1) (10.2) -
Revaluation gains and losses 13.9 5.5
Income from current disposals of intangible assets and property, plant and equipment (4.9) (11.1)
Change in the working capital requirement (51.2) 248.8
Inventories (56.6) 171.0
Trade accounts receivable, advances and down payments received (24.3) 144.2
Trade accounts payable, advances and down payments paid 35.2 (79.9)
Other receivables and debts (5.5) 13.5
Cash flow generated by current operations 567.4 657.3
(1) See Note 14.
Appendix 2: cash flow generated by other operating revenue and expenses
(€ millions) Notes 2010 2009
Other operating revenue and expenses 10 (12.4) (87.1)
Adjustments (3.4) 43.2
Impairment losses on goodwill 10 & 16 1.0 7.0
Profits resulting from bargain purchases 10 (42.8) -
Other net operating amortization and depreciation 10 9.1 32.3
Other net operating provisions 10 (0.8) 6.1
Income from non-recurring disposals of intangible assets and property, plant and equipment 10 3.8 -
Income from disposals of consolidated investments and available-for-sale financial assets 10 (1.4) (11.3)
Non-recurring foreign exchange gain related to a financial restructuring (1) 10.2 -
Share in net income of associates out of the recurring business 20 8.8 -
Income taxes paid on other operating revenue and expenses 8.7 9.1
Cash flow generated by other operating revenue and expenses (15.8) (43.9)
(1) See Note 14.
132 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
5.1.2 RECONCILIATION OF THE NET FINANCIAL DEBT
The net financial debt is the net position of Imerys towards financial
institutions, i.e. the total of financing liabilities decreased by cash,
cash equivalents and marketable securities. The net financial debt
is used in the management of the financial resources of the Group.
This indicator is used in particular in the calculation of financial ratios
that Imerys has to comply with under financing agreements entered
into with financial markets (Note 25.5 - Borrower’s liquidity risk). The
link between this indicator and the statement of financial position is
presented in Note 25.2.
The following notes present the change in the net financial debt in
two steps:
■ from current operating income to current free operating cash flow;
■ from current free operating cash flow to the change in net financial
debt.
Current free operating cash flow
The current free operating cash flow is the residual cash flow resulting from current operating business and remaining after payment of current
operating income taxes and operating capital expenditure, receipt of the disposal proceeds of operating assets and adjustment from cash
changes in operational working capital requirement.
(€ millions) 2010 2009
Current operating income 419.0 248.9
Operating amortization, depreciation and impairment losses 213.0 181.4
Net change in operating provisions (7.3) (17.6)
Share in net income of associates (5.7) 0.1
Dividends received from associates 2.0 3.8
Operating cash flow before taxes (current EBITDA) 621.0 416.6
Notional taxes on current operating income (1) (121.0) (69.5)
Current net operating cash flow 500.0 347.1
Paid capital expenditures (2) (154.9) (138.4)
Intangible assets (6.4) (2.9)
Property, plant and equipment (118.3) (93.3)
Overburden mining assets (3) (44.4) (22.5)
Debts on acquisitions 14.2 (19.7)
Carrying amount of current asset disposals 3.7 6.3
Change in the operational working capital requirement (45.7) 235.3
Inventories (56.6) 171.0
Trade accounts receivable, advances and down payments received (24.3) 144.2
Trade accounts payable, advances and down payments paid 35.2 (79.9)
Current free operating cash flow 303.1 450.3
(1) Effective tax rate on current operating income 28.9% 27.9%
(2) Recognized capital expenditures/asset depreciation ratio 79.4% 65.5%
The recognized capital expenditures/asset depreciation ratio equals the paid capital expenditures
(except for debts on acquisitions) divided by the increases in amortization and depreciation
Increases in asset amortization and depreciation 212.9 181.3
(3) Overburden mining assets (44.4) (22.5)
Overburden mining assets - non-current (20.1) (8.7)
Overburden mining assets - current (24.7) (13.6)
Neutralization of activated restoration provisions 0.4 (0.2)
1332010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
Change in net financial debt
(€ millions) 2010 2009
Current free operating cash flow 303.1 450.3
Financial income (loss) (64.5) (83.4)
Financial impairment losses and unwinding of the discount 6.6 9.7
Non-recurring foreign exchange gain related to a financial restructuring (1) (10.2) -
Income taxes on financial income (loss) 21.5 23.3
Change in income tax debt 0.8 26.7
Change in deferred taxes on current operating income 16.1 (6.6)
Change in other items of working capital (5.5) 13.6
Change in fair value 6.3 8.3
Change in dividends receivable from available-for-sale financial assets - 0.1
Current free cash flow 274.2 442.0
External growth (68.5) (11.0)
Acquisitions of investments in consolidated entities after deduction of the net debt acquired (68.9) (11.0)
Acquisitions of available-for-sale financial assets 0.4 -
Disposals 1.8 15.9
Disposals of investments in consolidated entities after deduction of the net debt disposed of 1.8 14.5
Disposals of available-for-sale financial assets - 0.1
Non-recurring disposals of property, plant and equipment and intangible assets - 1.3
Cash flow from other operating revenue and expenses (15.8) (44.2)
Dividends paid to shareholders and non-controlling interests (76.3) (63.6)
Financing requirement 115.4 339.1
Transactions on equity (4.5) 249.0
Net change in financial assets 0.2 0.1
Change in net financial debt 111.1 588.2
(1) See Note 14.
(€ millions) 2010 2009
Opening net financial debt (964.3) (1,566.1)
Change in net financial debt 111.1 588.2
Impact of changes due to exchange rate fluctuations (23.8) 14.0
Impact of changes in fair value of interest rate hedges 4.1 3.4
Impact of changes in accounting policies and other 0.1 (3.8)
Closing net financial debt (872.8) (964.3)
134 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
The aggregation of Cash-Generating Units into segments qualifies as a judgment of the Executive Management performed as follows:
Segments Cash-Generating Units
Performance & Filtration Minerals (PFM) Performance Minerals North America
Minerals for Filtration North America
Performance & Filtration Minerals Europe
Performance & Filtration Minerals South America
Performance & Filtration Minerals Asia Pacific
Vermiculite
Pigments for Paper (PP) Pigments for Paper
Materials & Monolithics (M&M) Clay Roof Tiles & Bricks
Monolithic Refractories
Kiln Furniture
Minerals for Ceramics, Refractories, Abrasives & Foundry (CRAF) Minerals for Ceramics
Minerals for Refractories
Fused Minerals
Graphite
However, the Executive Management considers that the holding structures dedicated to the centralized financing of the Group are no segments.
Their aggregates are thus presented in a reconciliation column with inter-segment eliminations (IS&H).
Consolidated income statement
Revenue from transactions of Imerys with each of its external customers never exceeds a threshold of 10.0% of the Group’s revenue.
As of December 31, 2010
(€ millions) PFM PP M&M CRAF IS&H Total
External revenue 582.0 758.9 922.2 1,077.3 6.3 3,346.7
Sales of goods 519.3 636.4 833.3 998.6 6.0 2,993.6
Rendering of services 62.7 122.5 88.9 78.7 0.3 353.1
Inter-segment revenue 12.7 8.2 0.4 27.7 (49.0) 0.0
Revenue 594.7 767.1 922.6 1,105.0 (42.7) 3,346.7
Current operating income 64.8 76.0 187.5 134.6 (43.9) 419.0
of which share in net income of associates (0.4) 5.3 0.3 0.5 - 5.7
of which amortization, depreciation and impairment losses (43.2) (70.6) (33.2) (64.0) (2.0) (213.0)
of which net operating provisions (3.7) (2.6) 1.9 (8.1) (1.1) (13.6)
Operating income 36.5 103.4 185.1 129.1 (47.5) 406.6
Financial income (loss) (3.3) (6.4) (0.5) (5.2) (49.1) (64.5)
Interest revenue 0.2 0.5 0.4 1.0 0.6 2.7
Interest expenses (0.3) (0.7) (1.4) (1.3) (55.6) (59.3)
Income taxes (14.6) (9.0) (67.6) (33.8) 28.2 (96.8)
Net income 18.6 88.0 117.0 90.1 (68.4) 245.3
5.1.3 INFORMATION BY SEGMENTS
Judgment
The reported segments correspond to the four business groups
of Imerys: Performance & Filtration Minerals (PFM); Pigments for
Paper (PP); Materials & Monolithics (M&M) and Minerals for Ceramics,
Refractories, Abrasives & Foundry (CRAF). Each of these segments
is engaged in the production and rendering of related goods and
services presenting geological, industrial and commercial synergies
and results from the aggregation of the Cash-Generating Units
(Note 19) followed each month by the Executive Management in its
business reporting.
1352010 REGISTRATION DOCUMENT IMERYS
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5
Consolidated financial statements
As of December 31, 2009
(€ millions) PFM PP M&M CRAF IS&H Total
External revenue 499.3 630.0 875.4 774.6 (5.6) 2,773.7
Sales of goods 442.3 506.5 791.5 716.4 (5.6) 2,451.1
Rendering of services 57.0 123.5 83.9 58.2 - 322.6
Inter-segment revenue 1.4 1.9 0.2 19.9 (23.4) 0.0
Revenue 500.7 631.9 875.6 794.5 (29.0) 2,773.7
Current operating income 26.9 41.6 168.0 44.0 (31.6) 248.9
of which share in net income of associates (0.1) (0.1) (0.2) 0.3 - (0.1)
of which amortization, depreciation and impairment losses (38.6) (55.0) (33.9) (51.8) (2.1) (181.4)
of which net operating provisions (3.8) (10.0) (8.8) (0.8) 1.5 (21.9)
Operating income 13.8 26.6 159.1 (4.0) (33.7) 161.8
Financial income (loss) (4.4) 2.1 (3.7) (10.8) (66.6) (83.4)
Interest revenue 0.2 0.7 0.2 0.8 0.4 2.3
Interest expenses (0.4) (0.7) (1.4) (2.1) (69.0) (73.6)
Income taxes (5.7) 2.7 (55.2) (2.6) 23.7 (37.1)
Net income 3.7 31.4 100.2 (17.4) (76.6) 41.3
Consolidated statement of financial position
As of December 31, 2010
(€ millions) PFM PP M&M CRAF IS&H Total
Capital employed - Assets 700.6 1,155.6 747.8 1,356.3 (15.2) 3,945.1
Goodwill (1) 147.0 164.9 199.8 438.0 0.7 950.4
Property, plant and equipment and intangible assets (2) 387.5 639.6 315.9 426.2 6.5 1,775.7
Inventories 54.0 115.2 111.2 264.7 - 545.1
Trade receivables 87.8 99.1 91.3 175.9 (7.6) 446.5
Other receivables - current and non-current 21.1 101.5 22.7 45.4 (17.7) 173.0
Investments in associates 3.2 35.3 6.9 6.1 2.9 54.4
Unallocated assets 481.7
Total assets 4,426.8
Capital employed - Liabilities 91.9 134.3 179.9 203.2 (17.2) 592.1
Trade payables 47.8 74.4 93.8 117.6 (16.5) 317.1
Other debts - current and non-current 34.9 63.9 84.5 58.3 8.3 249.9
Income taxes payable 9.2 (4.0) 1.6 27.3 (9.0) 25.1
Provisions 76.2 58.4 66.8 86.2 11.2 298.8
Unallocated liabilities 1,339.5
Total current and non-current liabilities 2,230.4
Total capital employed 608.7 1,021.3 567.9 1,153.1 2.0 3,353.0
(1) Increases in goodwill - - 1.9 4.8 - 6.7
(2) Acquisitions of property, plant and equipment and intangible assets 20.8 55.1 16.2 57.9 4.9 154.9
136 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
As of December 31, 2009
(€ millions) PFM PP M&M CRAF IS&H Total
Capital employed - Assets 672.4 934.3 746.4 1,223.2 (24.4) 3,551.9
Goodwill (1) 141.2 153.5 190.3 411.8 0.7 897.5
Property, plant and equipment and intangible assets (2) 376.3 514.2 331.7 413.0 9.9 1,645.1
Inventories 45.1 81.3 100.1 214.0 - 440.5
Trade receivables 79.5 77.2 76.0 138.9 (7.2) 364.4
Other receivables - current and non-current 23.3 77.7 41.7 39.5 (27.8) 154.4
Investments in associates 7.0 30.4 6.6 6.0 - 50.0
Unallocated assets 379.4
Total assets 3,931.3
Capital employed - Liabilities 65.4 87.7 159.7 165.9 (2.2) 476.5
Trade payables 40.9 52.9 91.6 91.2 (15.9) 260.7
Other debts - current and non-current 23.6 40.1 67.9 49.3 14.3 195.2
Income taxes payable 0.9 (5.3) 0.2 25.4 (0.6) 20.6
Provisions 52.8 54.0 66.8 76.9 29.7 280.2
Unallocated liabilities 1,318.8
Total current and non-current liabilities 2,075.5
Total capital employed 607.0 846.6 586.7 1,057.3 (22.2) 3,075.4
(1) Increases in goodwill 5.1 - - (0.8) - 4.3
(2) Acquisitions of property, plant and equipment and intangible assets 15.1 35.6 37.5 48.4 1.8 138.4
Revenue by geographical location
(€ millions) 2010 2009
France 708.5 683.0
Other European countries 1,218.8 994.7
North America 808.1 628.7
Asia - Oceania 433.7 327.2
Other countries 177.6 140.2
Revenue by geographical location of the businesses of the Group 3,346.7 2,773.7
France 561.4 561.2
Other European countries 1,226.6 1,014.5
North America 731.3 577.5
Asia - Oceania 546.9 398.7
Other countries 280.5 221.9
Revenue by geographical location of the customers 3,346.7 2,773.7
Assets by geographical location
(€ millions)
As of December 31, 2010 As of December 31, 2009
Goodwill
Property, plant and equipment and
intangible assets Total Goodwill
Property, plant and equipment and
intangible assets Total
France 166.7 354.3 521.0 163.6 376.7 540.3
Other European countries 331.3 373.9 705.2 325.2 380.8 706.0
North America 130.2 488.7 618.9 120.8 463.5 584.3
Asia - Oceania 240.8 157.8 398.6 215.5 145.5 361.0
Other countries 81.4 401.0 482.4 72.4 278.6 351.0
Total 950.4 1,775.7 2,726.1 897.5 1,645.1 2,542.6
1372010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
TABLE OF CONTENTS
❚ ACCOUNTING PRINCIPLES AND POLICIES 138
Note 1 Accounting principles 138
Note 2 Changes in accounting policies 138
Note 3 Texts effective after the closing date 139
Note 4 Summary of the main accounting policies 140
❚ NOTES TO THE CONSOLIDATED INCOME STATEMENT 146
Note 5 Revenue 146
Note 6 Raw materials and consumables used 146
Note 7 External expenses 146
Note 8 Staff expenses 147
Note 9 Other current revenue and expenses 149
Note 10 Other operating revenue and expenses 150
Note 11 Financial instruments 151
Note 12 Financial income (loss) 154
Note 13 Income taxes 156
Note 14 Net income, Group share 157
Note 15 Earnings per share 158
❚ NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 159
Note 16 Goodwill 159
Note 17 Intangible assets 161
Note 18 Property, plant and equipment 162
Note 19 Impairment losses 163
Note 20 Investments in associates 164
Note 21 Inventories 165
Note 22 Financial assets 165
Note 23 Capital 168
Note 24 Provisions 169
Note 25 Financial liabilities 174
Note 26 Deferred taxes 183
❚ OTHER INFORMATION 185
Note 27 Main consolidated entities 185
Note 28 Currency rates 187
Note 29 Related parties 187
Note 30 Commitments 188
Note 31 Country risks 190
Note 32 Events after the end of the period 190
5.1.4 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
138 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
❚ ACCOUNTING PRINCIPLES AND POLICIES
Note 1 Accounting principles
1.1 Statement of compliance with the Referential
Pursuant to European regulation no. 1606/2002 of July 19, 2002,
Imerys, a group of the industrial minerals sector, with its headquarters
in Paris, 154 rue de l’Université and whose share is admitted to
trading on the compartment A of Euronext Paris, has established
its consolidated financial statements as of December 31, 2010 in
compliance with IFRSs (International Financial Reporting Standards)
adopted within the European Union at the closing date (hereafter
“the Referential”). The financial statements have been closed on
February 15, 2011 by the Board of Directors of Imerys SA, the Parent
Company of the Group, on a going concern basis, in millions of Euros
with one decimal rounded up to the nearest tenth.
1.2 Differences between the Referential and IFRSs
The adoption process within the European Union may create
temporary time-lags at the closing date between the Referential
and IFRSs. However, in the absence of temporary time-lags as of
December 31, 2010, there is no difference at that date between the
Referential and IFRSs.
1.3 Optional statements
First-time adoption. Upon first-time adoption of the Referential,
Imerys presented financial statements as of January 1, 2004 that
included a retrospective application limited by some optional
exemptions provided for by standard IFRS 1 on first-time adoption
of IFRSs and exercised by the Group. The acquisition of businesses
prior to the first-time adoption have not been adjusted. The carrying
amount of property, plant and equipment has not been adjusted
except for mineral reserves and resources, which have been
measured at fair value. The actuarial differences of post-employment
employee benefits unrecognized at the date of first-time adoption
have been included in the measurement of the plan assets and
provisions against the reserves. Finally, the translation differences
of foreign businesses have been reclassified in the reserves.
Other optional statements. Some standards of the Referential
present recognition and measurement options. The amortized/
depreciated historical cost qualifies as the measurement basis of
intangible assets (Note 4.10), mining assets (Note 4.11) and property,
plant and equipment (Note 4.12). Inventories are measured on
the basis of their characteristics in accordance with the “First-In,
First-Out” (FIFO) or weighted average cost methods (Note 4.15).
The actuarial differences of post-employment employee benefits
are recognized in profit or loss in accordance with the corridor
method (Note 4.19). The rules of hedge accounting are applied to
the recognition of derivatives hedging currency, interest rate and
energy price risks (Note 4.21).
1.4 Absence of guidance
In the absence of any applicable text or sufficient detail of the
existing texts, the Executive Management has defined recognition
and measurement policies on three subjects: purchase commitment
of non-controlling interests of an entity controlled by the Group
(Note 4.6), greenhouse gas allowances (Note 4.10) and mining assets
(Note 4.11).
Note 2 Changes in accounting policies
2.1 Mandatory changes
Anticipated application
Imerys is not applying any text by anticipation in 2010. The Group
had not applied any text by anticipation in 2009.
Application upon effective date
IFRS 3 Revised, Business Combinations. This revision applicable
prospectively as of January 1, 2010 qualifies obtaining or losing
control as significant events, justifying to modify the recognition and
measurement of an investment. Thus, any formerly held interest is
remeasured at fair value against the other operating revenue and
expenses (Note 10) when control is obtained. Goodwill (Note 16) is
recognized at that date. The revised standard leaves the option, for
each acquisition, to recognize goodwill as an asset corresponding
to either the sole Group interest (former method), or to the Group
and non-controlling interests (full goodwill). Transaction costs,
formerly included in the acquisition cost are now recognized as
other operating revenue and expenses. In accordance with this new
method, the amount recognized as an asset as of December 31,
2009 with respect to future acquisitions projects and amounting to
€0.6 million is recognized as other operating revenue and expenses
in 2010. Symmetrically to the date when control is obtained, the loss
of control triggers the derecognition of assets and liabilities and the
remeasurement at fair value of the residual interest against the other
operating revenue and expenses.
1392010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
Amendment to IAS 27, Consolidated and Separate Financial
Statements. This amendment applicable prospectively as of
January 1, 2010 draws the consequences of revised IFRS 3 on
the consolidation rules. Thus, as control is at the centre of the
new treatment, the changes in interests with no loss of control
is recognized in equity without any modification of goodwill. This
amendment has no impact on the recognition and measurement
policy defined by the Executive Management on the treatment
of purchase commitment of non-controlling interests of an entity
controlled by the Group (Note 4.6).
Amendment to IAS 39: Eligible Hedged Items. This amendment
applicable retrospectively as of January 1, 2010 specifies the
principles of hedge accounting in two situations: one-sided risk in a
hedged item and inflation in a hedged financial item. This amendment
has no impact on hedge accounting (Note 25.4 - Derivative
instruments management principles).
IFRIC 16, Hedges of a Net Investment in a Foreign Operation.
This interpretation applicable prospectively as of January 1, 2010
mainly confirms that the currency risk eligible to hedge accounting
appears between the functional currency (and not the presentation
currency) of a holding entity and the functional currency of a
foreign operation and that the instruments intended to hedge that
risk may be held by one or several entities within the Group. This
interpretation has no impact on the recognition of the hedges of the
net investments in the foreign businesses (Note 25.5 - Conversion
of financial statements risk).
Improvements to IFRSs (April 2009). This continuous project
provides a series of necessary amendments to the existing texts.
Besides, the texts hereafter do not concern the transactions,
events or conditions existing within the Group: Revised IFRS 1,
First-Time Adoption of IFRS; Amendment to IFRS 1: Additional
Exemptions for First-Time Adopters; Amendment to IFRS 2, Group
Cash-settled Share-based Payment Transactions; Amendment to
IAS 32: Classification of Rights Issues; IFRIC 12, Service Concession
Arrangements; IFRIC 15, Agreements for the Construction of Real
Estate; IFRIC 17, Distributions of Non-cash Assets to Owners; and
IFRIC 18, Transfers of Assets from Customers.
2.2 Voluntary changes
Imerys is not performing any voluntary change in accounting
policies in 2010. In 2009, the Group had performed two voluntary
changes in accounting policies impacting the presentation of
financial statements: presentation in financial income (loss) of the
financial components of the net expense of defined benefit plans
and presentation in operating income of the share in net income of
associates.
Note 3 Texts effective after the closing date
On the basis of the last projected adoption agenda of IFRSs within
the European Union published on January 17, 2011 by the EFRAG
(European Financial Reporting Advisory Group), Imerys will apply the
following texts after December 31, 2010:
3.1 Application in 2011
Amendment to IFRIC 14, Prepayments of a Minimum Funding
Requirement. This amendment applicable as of January 1, 2011
corrects an unintended consequence of the initial version of IFRIC 14.
To measure the asset of an employee benefits plan, this interpretation
proscribed in certain circumstances to consider the prepaid
contributions that could be set as a reduction of future minimum
contributions. This amendment will have no significant impact on the
measurement of employee benefits assets (Note 24.1).
Besides, the texts hereafter do not concern the transactions, events
or conditions existing within the Group: Amendment to IFRS 1:
Limited Exemption from Comparative IFRS 7 Disclosures for First-
Time Adopters; IAS 24 Revised, Related Party Disclosures; IFRIC 19,
Extinguishing Financial Liabilities with Equity Instruments.
3.2 Application in 2012
The following texts, whose adoption process is in progress within
the European Union as of December 31, 2010, do not concern
the transactions, events or conditions existing within the Group:
Amendments to IFRS 7 Financial Instruments: Disclosures;
Amendments to IAS 12 Income Taxes: Deferred Tax - Recovery of
Underlying Assets; Amendments to IFRS 1 First-Time Adoption of
International Financial Reporting Standards: Severe Hyperinflation
and Removal of Fixed Dates for First-Time Adopters.
3.3 Application in 2013
IFRS 9 (Phase 1), Financial Instruments: Classification and
Measurement. As of December 31, 2010, the adoption process
of this amendment is in progress within the European Union and
the EFRAG has not communicated any indicative adoption date as
of February 15, 2011, the date at which the financial statements
are closed by the Board of Directors. On its side the IASB, issuer
of the text, requires mandatory application as of January 1, 2013.
Imerys shall thus apply this amendment at this date at the latest, on
condition of its prior adoption within the European Union. On this
same condition, the Group could decide to apply it by anticipation
before January 1, 2013. Under its current version as published on
November 12, 2009, this text represents the first step of a reform
140 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
intended to simplify IAS 39. This first amendment reduces the
number of categories of financial instruments by focusing on the
two measurement bases that are fair value and amortized cost.
Former categories New categories
Available-for-sale financial assets Fair value
Financial assets and liabilities at fair value
through profit or loss Fair value
Loans and receivables Amortized cost
Financial liabilities at amortized cost Amortized cost
This amendment shall modify the classification of information
disclosed in Notes 11, 12, 22.1 and 25.1 without impacting the
recognition and measurement rules of financial instruments. These
rules shall however be modified by two subsequent amendments
non-published as of December 31, 2010: impairment losses of
financial assets measured at amortized cost (Phase 2) and hedge
accounting (Phase 3).
Note 4 Summary of the main accounting policies
4.1 Accounting policies, errors and estimates
Accounting policies are identical from one period to the other and
are modified either on a mandatory basis to apply a new standard
or interpretation (Note 2.1), or on a voluntary basis to improve the
reliability or the relevance of information (Note 2.2). Changes in
accounting policies are accounted for retrospectively, unless required
by the specific transition provisions of the standard or interpretation.
The financial statements concerned by the change in accounting
policies are modified for all reported periods, as if the new policy had
always been applied. Errors are corrected retrospectively. Estimates
are intended to provide a reasonable assessment of the latest reliable
information available on an uncertainty. They are revised to reflect
changes in circumstances, new information available and experience
effects. The significant estimates of the Executive Management are
separately outlined in each note concerned (Notes 17, 18, 19, 24.1
and 24.2). Changes in estimates are accounted for prospectively.
4.2 Events after the end of the period
Events occurring between the end of the period and the authorization
of issue of the financial statements by the Board of Directors result in
an adjustment only if they reveal, specify or confirm situations existing
at the closing date (Note 32).
4.3 Financial statements
Imerys publishes annual financial statements as of December 31,
and interim financial statements as of June 30, in accordance with
the principles of the Referential (Note 1). The main presentation
conventions are the following:
■ aggregation by positions: by similar natures or functions in
accordance with materiality;
■ classification of assets and liabilities: by increasing order of
liquidity and payability distinguishing between non-current and
current items, when these shall be recovered or settled in more
or less than twelve months after the end of the period;
■ classif ication of revenue and expenses: by nature and
incorporation in the cost of an asset or a liability in application of
a standard or interpretation;
■ offset: in application of a standard or interpretation for assets and
liabilities on the one hand and revenue and expenses on the other;
■ comparative information: with respect to period N-1; comparative
information with respect to period N-2 is incorporated by reference
(see chapter 8, section 8.4 of the Registration Document).
Operating income includes the current operating income and the
other operating revenue and expenses. The current operating income
(Notes 5 to 9) reflects the performance of the ordinary activities
of Imerys. The other operating revenue and expenses (Note 10)
correspond, in accordance with the recommendation CNC 2009-
R.03 of the French accounting standard setting authority on the
format of IFRS financial statements, to items of revenue and expenses
resulting from a limited number of well identified, non-recurring and
significant events, such as the profit or loss impacts from obtaining
or losing control of a business, of a restructuring, of an impairment
loss of goodwill or of a significant litigation. The financial income
(loss) mainly includes the cost of indebtedness, foreign exchange
differences, the expected return on defined benefit plan assets, the
unwinding of the discount of provisions and impairment losses on
financial assets (Note 12).
4.4 Information by segments
The segments correspond to the four following business groups:
■ Performance & Filtration Minerals: minerals for the plastics,
rubber, coatings, sealants and adhesives, health, beauty and
filtration of nutrition liquids;
■ Pigments for Paper: filler and coating products for paper;
■ Materials & Monolithics: construction materials in clay and slate
and monolithic products and solutions for high-temperature
industries;
■ Minerals for Ceramics, Refractories, Abrasives & Foundry:
minerals mainly for floor tiles, sanitaryware, porcelain, mobile
energy as well as high-temperature and abrasive industries.
1412010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
Each of these segments is engaged in the production and rendering
of related goods and services presenting geological, industrial and
commercial synergies and results from the aggregation of the Cash-
Generating Units (Note 19) followed each month by the Executive
Management in its business reporting. The aggregation of Cash-
Generating Units into segments qualifies as a judgment of the
Executive Management presented in 5.1.3 Information by segments.
The financial information by segment is measured in accordance with
the principles of the Referential (Note 1). The transactions between
segments are measured at the prices that two independent parties
would have agreed upon under economic conditions equivalent to
those of the related transaction.
4.5 Earnings per share
The Imerys financial statements disclose basic earnings per share
and diluted earnings per share (Note 15). The basic earnings per
share is equal to the net income attributable to holders of ordinary
shares divided by the weighted average number of ordinary shares
outstanding over the period, i.e. excluding treasury shares. Basic
earnings per share is further broken down as net basic earnings per
share from current operations and net basic earnings per share.
The calculation of the diluted earnings per share simulates the
dilutive effect of the share options granted by Imerys (Note 8). The
previously defined weighted average number of ordinary shares is
thus increased by the weighted average number of ordinary shares
that would be issued if all dilutive options would be exercised at
the closing date. The number of dilutive options is calculated by
difference between the number of shares that would result from the
exercise of the share options and the number of shares that would
be issued at the period average market price for an issue of the same
amount. Upon the calculation of the amount of this issue, each share
resulting from the exercise of the share options is considered as
issued at the exercise price of the share option increased by the fair
value of the services to be rendered as measured using the Black
& Scholes pricing model (Note 4.17). The excess of the number of
shares from share options over the number of shares issued under
market conditions is the number of dilutive shares. However these
only are taken into account in the calculation of the diluted earnings
per share where the corresponding share options are in the money,
i.e. where their exercise price is inferior to the period average market
price of the Imerys share.
4.6 Entities controlled by the Group
The entities controlled by Imerys, i.e. those over which the Group
has the power to govern the financial and operating policies, are
consolidated (Note 27). Their assets, liabilities, revenues and expenses
thus contribute to the various positions of the consolidated financial
statements. Intra-group transactions are eliminated. An entity’s
losses are allocated to non-controlling interests proportionally to
their interest, even if they finally present a negative balance. Changes
in interest with no impact on control are recognized in equity. In the
absence of sufficient detail of the texts, the Executive Management
considers that any commitment entered into by Imerys with the
intent to acquire shares from the minority interests results in the
recognition of a liability measured at the fair value of the commitment
against a derecognition of these interests. Any difference between
the fair value of the liability and the carrying amount of the minority
interests is recognized in equity. No entity is consolidated under the
proportionate consolidation method.
4.7 Investments under significant influence of the Group
The investments held in entities under significant influence of
Imerys, i.e. in which the Group has the power to participate to the
financial and operating policies without however governing these, are
measured under the equity method (Note 20). The shares held in the
net assets and results of these entities are thus presented in distinct
positions in the assets and in the operating income.
4.8 Foreign currency translation
The consolidated financial statements of Imerys are stated in Euro.
The functional currencies of the main consolidated entities (Note 27)
correspond to the local currencies. The accumulated impact of
the translation of the financial statements of foreign businesses is
recognized in equity. The assets and liabilities of foreign businesses
are translated at the closing rate and their revenue and expenses at
the average rate of the period (Note 28).
The non-monetary assets and liabilities resulting from transactions
in foreign currencies are measured at the rate of the day or the
average rate of the month of the transaction. Except for derivative
financial instruments, monetary assets and liabilities resulting from
transactions in foreign currencies are measured at the closing
rate. The corresponding unrealized foreign exchange differences
are recognized in other financial revenue and expenses (Note 12)
except for those generated by the monetary assets and liabilities of
net investments in foreign businesses and by their hedges that are
recognized in equity (Note 25.5 - Conversion of financial statements
risk). Upon disposal of a foreign business, the accumulated impact of
the translation of its financial statements and hedges is recognized
in other operating revenue and expenses with the result on disposal
of the business.
4.9 Goodwill
Goodwill is the excess of the fair value of an acquired business over
its identifiable net asset (Note 16). Goodwill is recognized at the
date control is obtained. The costs of an acquisition transaction are
recognized as incurred in profit or loss in other operating revenue
and expenses (Note 10). Any excess of the identifiable net asset
of the acquired business over its fair value (negative goodwill) is
credited to the acquirer’s profit or loss on the acquisition period in
other operating revenue and expenses (Note 10). The measurement
of goodwill is finalized within the twelve months following the date
at which control is obtained. The goodwill of a foreign business is
measured in the functional currency of the business and translated
in accordance with the rules applicable to the translation of financial
statements of foreign businesses. Goodwill is not depreciable. It is
allocated to the Cash-Generating Units (Note 19) that benefit from
the synergies resulting from the acquisition. Goodwill is subject to a
first impairment test before the closing date of the acquisition period
and subsequently to annual or more frequent tests if there is an
indication that it may be impaired. An impairment loss on goodwill
is recognized in other operating revenue and expenses (Note 10)
and cannot be reversed.
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FINANCIAL STATEMENTS5Consolidated financial statements
4.10 Intangible assets
Intangible assets controlled by Imerys (Note 17) are recognized as
assets over their useful lives. They are measured at acquisition cost,
decreased by accumulated amortization and any impairment loss.
The expenditures incurred by the research teams of Imerys to improve
the quality and properties of products generally address specific
requirements of customers and are thus immediately recognized
as expenses in current operating income. In the absence of any
applicable text, the Executive Management considers as intangible
assets the rights held to justify the greenhouse gases emissions
of the Group (Note 17). The rights received free of charge are
recognized for a value of zero and the rights acquired on the market
are recognized at the acquisition cost. Where at the closing date the
rights held are inferior to actual emissions, a provision is recognized in
current operating income for the value of rights to acquire, measured
at market value (net liability method). The amortization methods of
intangible assets qualify as an estimate of the Executive Management
presented in Note 17.
4.11 Mining assets
In the absence of any specific applicable text, the Executive
Management has defined the accounting recognition and
measurement policies hereafter on mining assets. Prospection
expenditures, i.e. the research of new knowledge on the mineral
producing potential, technical feasibility and commercial viability of
a geographical area, are immediately recognized as expenses in
current operating income. Mining rights are recognized as intangible
assets and are initially measured at acquisition cost (Note 17).
Mineral reserves qualify as property, plant and equipment and are
initially measured at acquisition cost excluding subsoil, increased
by expenditures incurred to determine the tonnage of ore present in
the deposit. Overburden works, i.e. works of removal of the top soil
to enable access to the deposit, are also recognized as property,
plant and equipment. Their initial measurement incorporates their
production cost and the discounted value of restoration obligations
resulting from the deterioration caused by their construction. Mineral
reserves and overburden assets form the position “Mining assets”
of Note 18. Mining assets are subsequently measured at cost,
decreased by accumulated amortization and any impairment loss.
The depreciation methods of mining assets qualify as an estimate of
the Executive Management presented in Note 18. Mining assets are
allocated to Cash-Generating Units (Note 19) as the other assets of
the Group and are subject to the same impairment tests.
4.12 Property, plant and equipment
Property, plant and equipment (Note 18) is recognized as an asset if it
is controlled as a result of a title of ownership, or under a finance lease
that transfers the risks and rewards incident to ownership. Property,
plant and equipment is initially measured at acquisition or production
cost. The initial cost of items under finance lease is the lower of the
fair value of the asset and the discounted value of future minimum
payments. The cost of property, plant and equipment incorporates
the cost of borrowings that finance their construction or production
where these require a substantial period of time. The cost of property,
plant and equipment is decreased, where applicable, by the amount
of government grants that finance their acquisition or construction.
Maintenance and repair expenditures are immediately recognized as
expenses in current operating income. The cost of property, plant
and equipment incorporates, in particular for satellite industrial
facilities constructed on the land of customers, the discounted value
of restoration or dismantling obligations, where a present obligation
exists (Note 24.2). Property, plant and equipment is subsequently
measured at cost, decreased by accumulated depreciation and any
impairment loss. The depreciation methods of property, plant and
equipment qualify as an estimate of the Executive Management
presented in Note 18.
4.13 Impairment tests
Cash-Generating Units (CGUs) are the smallest groups of assets
at the level of which the three following criteria are verified: a
homogeneous production process in terms of portfolio of minerals,
transformation processes and applications, an active market and
a level of operating power in terms of continuation, restructuring
or discontinuation of mining, industrial and commercial activity.
Any accordingly identified group of assets generates, through its
continuing use, cash flows that are largely independent from the
cash flows of other groups of assets. CGUs are part of the analysis
structure followed each month by the Executive Management in its
business reporting. All assets within the Group including goodwill
and mining assets, are allocated to a CGU.
An impairment test (Note 19) is performed every twelve months on
all CGUs at the end of the period. In addition to this annual test,
impairment indicators may require the immediate performance of
a test in case of an unfavorable trend. Furthermore, each activity
manager, under the supervision of business group controllers,
ensures that no individual asset within a CGU presents any
impairment loss issue. An impairment loss is recognized as soon as
the recoverable amount of a CGU or an individual asset becomes
inferior to its carrying amount. Any improvement in the recoverable
amount of a CGU or an individual asset results in the reversal of the
previously recognized impairment loss in the limit of the carrying
amount that would have been obtained in the absence of impairment
loss. Impairment losses on goodwill cannot be reversed.
The impairment test consists in comparing the carrying amount of
these assets to their recoverable amount. The latter is the higher
between the fair value less costs to sell and the value in use.
Fair value corresponds to the price of disposal. Value in use is
measured by discounting the future cash flows generated by the
continuous use of assets and by their final disposal. Future cash flows
correspond to current free operating cash flow (5.1.2 Reconciliation
of the net financial debt/Current free operating cash flow) adjusted
by the position “Change in other items of working capital” (5.1.2
Reconciliation of the net financial debt/Change in net financial debt).
The definitions of CGUs and impairment indicators qualify as
judgments of the Executive Management. The duration and the
amount of the future cash flows as well as the discount rates
intervening in the calculation of the values in use of the CGUs
qualify as estimates of the Executive Management. These items are
presented in Note 19.
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FINANCIAL STATEMENTS
5
Consolidated financial statements
4.14 Non-current assets held for sale and discontinued operations
When at the closing date, it is highly probable that non-current assets
or groups of directly related assets and liabilities shall be disposed
of, they are designated as non-current assets or groups of assets
held for sale. Their sale is considered as highly probable if, at the
closing date, a plan designed to sell them at a price that is reasonable
with respect to their fair value has been initiated to identify a buyer
and to conclude definitively the sale within a maximum of one year.
Non-current assets or groups of assets held for sale are presented
in separate positions in the financial statements. They cease to be
depreciated and are measured at the lower of their carrying amount
and their fair value less costs to sell. Non-current assets or groups of
assets that are to be closed rather than sold are non-current assets
that are to be abandoned and not held for sale.
Where non-current assets corresponding to a disposal or held
for sale or to be abandoned correspond to one or several CGUs
(Note 19) and are to be abandoned as part of a single coordinated
plan, they qualify as discontinued operations and their related
flows are disclosed separately in the income statement and in the
statement of cash flows.
4.15 Inventories
Inventories (Note 21) are recognized as assets at the date at which
the risks, rewards and control are transferred to Imerys. Upon the
sale, their removal is recognized against an expense in current
operating income at the same date as the related revenue. Inventories
are measured at the lower of the cost of production and net realizable
value. Where production is inferior to normal capacity, incorporable
fixed expenses specifically exclude the share corresponding to
under-activity. Inventories presenting similar characteristics are
measured in accordance with the same formula. The formulas used
within the Group are the “First-In, First-Out” (FIFO) and the weighted
average cost. Where the cost of production is not recoverable, it
is written-down to its net realizable value in accordance with the
conditions existing at the closing date.
4.16 Non derivative financial assets
Where the execution of a contract results in the symmetrical creation
of an asset for Imerys and a liability or equity instrument for the other
party, the item recognized by the Group is a financial asset. Such
elements are subject to a designation that relates them to one of the
following categories: “Available-for-sale financial assets”, “Financial
assets at fair value through profit or loss” or “Loans and receivables”.
The designation of a financial asset to a category commands its
recognition and measurement mode.
Available-for-sale financial assets. Imerys holds non-listed
investments in entities over which the Group has neither control,
nor significant influence, nor intent to dispose of in the short term
(Note 22.2). These investments are recognized as assets at the date of
the purchase commitment and are maintained at a carrying amount
representative of fair value. The changes of the latter are recognized
in equity except for negative changes qualifying as objective evidence
of impairment which are recognized in profit or loss.
Financial assets at fair value through profit or loss. Imerys holds
marketable securities with the intent to perform a result on disposal in
the short-term. These investments are recognized as assets between
the dates of purchase and disposal and the changes in fair value
are recognized in other financial revenue and expenses (Note 12)
in accordance with the market prices published at the closing date.
Loans and receivables. A trade receivable (Note 22.3) is recognized
with respect to a sale of goods upon transfer of the risks, rewards
and control. A trade receivable is recognized with respect to the
rendering of services to the extent of the percentage of completion
of services at the closing date. Furthermore, for both sales of goods
and rendering of services, a receivable is recognized only if it is
recoverable and the amount of the transaction and that of the costs
necessary to complete the transaction can be measured reliably.
Sales of goods and rendering of services are measured at the fair
value of the transaction, decreased by trade and volume rebates, as
well as discounts for early payment. After their initial recognition, they
are measured at their amortized cost. Where the occurrence of a
credit event makes the carrying amount of a trade receivable partially
or fully irrecoverable, it is individually written-down to its recoverable
amount by means of a write-down in accordance with the conditions
existing at the closing date (Note 22.4). A receivable sold to a banking
institution for financing purposes is only derecognized where the
factoring contract also transfers to the factor the entire risks and
rewards related to the receivable (Note 22.3). The category of loans
and receivables also includes cash, i.e. cash on hand, demand
deposits and cash equivalents. The latter are highly liquid investments
with a 3-months maximum term whose equivalent amount in cash
is known or subject to insignificant uncertainty. In the statement
of cash flows, cash and cash equivalents also include the position
“Bank overdrafts” presented as liabilities.
4.17 Equity instruments
Treasury shares. The repurchase by Imerys of its own shares is
recognized at acquisition cost as a decrease in equity. The result
performed upon any subsequent disposal is directly recognized in
equity.
Share-based payments. The fair value of services rendered against
the grant of Imerys share options and free shares granted after
November 7, 2002 is measured using the Black & Scholes pricing
model by reference to the fair value of instruments at the grant date
(Note 8). This measurement takes into consideration the exercise price
and life of instruments, the underlying share price, the turnover rate
of beneficiaries, as well as the volatility of the Imerys share. Volatility
equals the standard deviation of the historical monthly returns of the
Imerys share over the expected life of the instruments. In the majority
of cases, the acquisition of rights is subject to a condition of duration
of service and the fair value of services rendered is amortized in the
position “Staff expenses” over the vesting period of rights, against
an increase in equity. The accounting treatment is identical where,
in addition to the duration of service condition, the acquisition of
rights is subject to the achievement of pre-determined economic
performance conditions. The volatility and the assumptions related to
the probability of acquisition of rights are revised at each closing date.
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FINANCIAL STATEMENTS5Consolidated financial statements
4.18 Provisions
A provision (Note 24.2) is recognized as soon as it becomes
probable that a present obligation shall require a settlement whose
amount can be measured reliably. Provisions are recognized against
the profit or loss except for provisions for dismantling and some
provisions for restoration whose counterpart is included in the cost
of the assets whose construction has created the obligation. This
treatment mainly applies to satellite industrial facilities constructed
on the land of customers and to mining overburden assets. The
measurement of provisions corresponds to the best estimate of the
amount required to settle the obligation. Provisions whose settlement
is expected within twelve months after the end of the period or whose
settlement may occur at any time are not discounted. Provisions
whose settlement is expected after twelve months after the end of
the period are discounted. Changes in discounted provisions due
to a revision of the amount of the obligation, of its phasing or of
its discount rate are recognized in profit or loss or, for provisions
recognized against assets, as an adjustment of the cost of the
latter. The unwinding is recognized as a debit in the other financial
revenue and expenses (Note 12). The assessment of the probability
of settlement and amount of the obligation, of the phasing of future
payments and of discount rates qualify as estimates of the Executive
Management presented in Note 24.2.
4.19 Employee benefits
Imerys contributes, in accordance with the laws and customs of
each country, to the constitution of reserves for the retirement of
its employees by paying, either on a mandatory or voluntary basis,
contributions to third parties institutions such as pension funds,
insurance companies or financial institutions. These plans, without
guaranteeing the level of benefits returns, are defined contribution
plans. These contributions are recognized in the position “Staff
expenses” (Note 8).
Furthermore, Imerys may grant post-employment retirement and
medical benefits whose financing is assumed by the Group or
outsourced to external funds. The measurement of the obligations
of these defined benefit plans (Note 24.1) is performed in accordance
with the Projected Unit Credit Method and uses financial and
demographic actuarial assumptions. These are used to measure
the value of services rendered over the period on the basis of an
estimated salary at retirement date. Provisions (or assets) recognized
correspond to the discounted value of the obligation, decreased by
the fair value of plan assets and unrecognized past service cost and
actuarial differences. The discount rates are fixed by reference to the
rates of bonds issued by companies rated AA (high quality). Actuarial
assumptions qualify as estimates of the Executive Management
presented in Note 24.1.
The net expense of post-employment plans is recognized in the
position “Staff expenses” (Note 8), except for the unwinding of
obligations and the expected return on assets that are recognized
in other financial revenue and expenses (Note 12) and for the
curtailments caused by a restructuring that are recognized in
other operating revenue and expenses (Note 10). Unrecognized
past service cost is progressively included in the measurement of
provisions (or assets) by a straight-line amortization over an estimate
of the average vesting period of the rights. Actuarial differences are
reflected in the measurement of provisions (or assets) as soon as their
accumulated unrecognized amount exceeds 10.0% of the higher
between the obligation and asset’s fair value. The fraction of actuarial
differences that exceeds the higher of these thresholds is recognized
by a straight-line amortization in profit or loss over an estimate of the
average remaining working lives of beneficiaries (corridor method).
Any curtailment or settlement and related actuarial differences and
unrecognized past service costs are recognized in profit or loss as
they occur.
4.20 Non derivative financial liabilities
Loans (Note 25.2) are initially measured at the fair value of the amount
received, less transaction costs. They are subsequently measured
at amortized cost by using the effective interest rate method. Trade
accounts payable and other financial liabilities are measured at
amortized cost.
4.21 Derivative financial instruments
Imerys uses derivative financial instruments to reduce its exposure to
currency, interest rate and energy price risks. The exclusive purpose
of these instruments is to hedge economic risks to which the Group
is exposed. Financial instruments are recognized at the transaction
date, i.e. at the subscription date of the hedging contract. However,
only financial instruments that meet the criteria of hedge accounting
defined by standard IAS 39 on financial instruments follow the
accounting treatment described hereafter. The changes in fair value
of financial instruments that do not qualify for hedge accounting are
immediately recognized in other financial revenue and expenses.
All transactions qualified as hedge accounting are documented by
reference to the hedging strategy by identifying the hedged risk, the
hedged item, the hedging instrument, the hedging relationship and
the measurement method of the hedge relationship effectiveness.
The measurement of the hedge effectiveness is reviewed at the
end of each period. Derivatives are measured at fair value upon
initial recognition. Subsequently, the fair value is re-measured at
the end of each period by reference to market terms. Derivatives
recognized as assets and liabilities are classified as current and non-
current in accordance with their maturities and those of underlying
transactions. Accounting for a hedge derivative depends upon its
designation as either fair value hedge, or cash flow hedge or hedge
of a net investment in a foreign operation (Notes 11, 12 and 25.5).
Fair value hedge. Where the changes in fair value of a recognized
asset or liability or a firm commitment may have an impact on the
profit or loss, these changes may be hedged by a fair value hedge.
The hedged item and the hedging instrument are re-measured
symmetrically against the profit or loss at the end of each period.
The impact in profit or loss is limited to the ineffective portion of the
hedge.
Cash flow hedge. A cash flow hedge enables to hedge the
unfavorable changes in cash flows related to a recognized asset
or liability or a highly probable future transaction, where these
changes may have an impact on the profit or loss. At the end of
each period, the effective portion of the hedge is recognized in equity
and the ineffective portion in profit or loss. When the transaction is
recognized, the effective portion in equity is reclassified in profit or
loss at the same time the hedged item is recognized.
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Consolidated financial statements
Hedge of a net investment in foreign businesses. The foreign
exchange differences generated by the net assets held by the Group
in foreign currencies may be hedged. At the end of each period,
the effective portion of the hedge is recognized in equity and the
ineffective portion in profit or loss. Upon disposal of the business, the
effective portion in equity is reclassified in other operating revenue
and expenses with the result on disposal.
4.22 Income taxes
Current tax results in the recognition of a liability to the extent it is
unpaid and of an asset where the amount already paid exceeds the
amount due or if a tax loss can be carried back.
Deferred tax assets and liabilities are accounted for with respect to
all temporary taxable differences between the tax and consolidated
values of assets and liabilities, except mainly for differences related to
the initial recognition of goodwill and, in the case of taxable temporary
differences between the accounting and tax values of investments,
where the Group is in a position to control the date of reversal of the
temporary difference and it is probable that the temporary difference
shall not reverse in a foreseeable future (Note 26). A deferred tax
asset is recognized with respect to taxable temporary differences,
tax losses and tax credits only if it is probable that a future taxable
profit shall be set against these elements, or there are taxable
temporary differences in the same tax entity, that come to maturity
over the period these elements remain recoverable. Tax rates and
laws used are those that are enacted or substantively enacted at the
closing date and shall be applicable over the period of reversal of
the timing difference. Deferred taxes are not discounted. Deferred
tax assets and liabilities are offset by tax entity, i.e. by legal entity or
tax consolidation group.
Current and/or deferred taxes are recognized in the same level of
profit or loss as the related losses (Note 13). That principle of linking
the tax to its base also applies to the transactions directly recognized
in equity (Note 13).
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FINANCIAL STATEMENTS5Consolidated financial statements
❚ NOTES TO THE CONSOLIDATED INCOME STATEMENT
Note 5 Revenue
(€ millions) 2010 2009
Sales of goods 2,993.6 2,451.1
Rendering of services 353.1 322.6
Total 3,346.7 2,773.7
Revenue amounts to €3,346.7 million in 2010 (€2,773.7 million in
2009), i.e. an increase of + 20.7% (- 19.6% in 2009), including a
positive effect of + €134.0 million due to foreign currency changes
(+ €17.4 million in 2009) and a positive structure impact of
+ €23.9 million (- €5.7 million in 2009). At comparable structure and
foreign currency rates, it increases by + 14.9% (- 19.9% in 2009).
Note 6 Raw materials and consumables used
(€ millions) 2010 2009
Raw materials (549.2) (348.0)
Energy (345.1) (280.2)
Chemicals (71.3) (53.1)
Other raw materials (162.6) (106.7)
Merchandises (111.0) (73.2)
Change in inventories 56.5 (170.7)
Property, plant and equipment produced by the entity 4.1 5.8
Total (1,178.6) (1,026.1)
Note 7 External expenses
(€ millions) 2010 2009
Freight (390.6) (298.2)
Operating leases (45.5) (41.8)
Subcontracting (103.6) (94.3)
Maintenance and repair (89.7) (61.7)
Fees (57.4) (44.8)
Other external expenses (162.7) (134.1)
Total (849.5) (674.9)
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FINANCIAL STATEMENTS
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Consolidated financial statements
Note 8 Staff expenses
(€ millions) 2010 2009
Salaries (470.7) (432.7)
Social contributions (99.6) (94.8)
Net change in the provisions of defined benefit plans 20.5 39.7
Contributions to defined benefit plans (37.2) (55.9)
Contributions to defined contribution plans (17.9) (16.6)
Profit-sharing (21.0) (18.5)
Other employee benefits (9.7) (8.3)
Total (635.6) (587.1)
Share-based payments expense
Imerys attributes share options whose exercise results in the subscription of shares created for that purpose, as well as free shares acquired
on the market.
The position “Other employee benefits” includes the cost of the corresponding plans, broken down as follows:
Number of options (1)
Exercise price (€) (1) Maturity Volatility
Turnover rate
Average dividend
ratePerformance
conditions
Fair value of the option
(Black & Scholes)
(€)
Total cost of each
plan (€M)
2009 cost of
the plans (€M)
2010 cost of
the plans (€M)
Share options plans
2006 687,744 63.53 6 years 17.5% 11.8% 3.1% - 8.97 (5.0) (0.6) -
2007 601,832 65.61 5 years 20.0% 20.0% 3.1% - 12.40 (5.5) (2.0) (0.1)
2008 535,120 54.19 5 years 19.2% 12.1% 3.0% - 8.88 (3.9) (1.3) (1.3)
2009 464,000 34.54 5 years 25.3% 13.4% 3.0% - 5.77 (2.3) (0.3) (0.8)
2010 422,800 46.06 5 years 28.1% 13.4% 3.0% - 7.59 (2.8) - (0.6)
2010 60,000 46.06 5 years 28.1% 0.0% 3.0% - 7.59 (0.5) - (0.1)
2010 82,000 44.19 5 years 31.0% 0.0% 3.0% 75.0% 9.40 (0.6) - -
Free shares plans
2008 (2) 55,053 - 3 years - 12.1% 3.0% 0.0% 52.86 - - -
2008 5,374 - 3 years - 0.0% 3.0% - 52.86 (0.2) - (0.1)
2008 42,984 - 2 years - 0.0% 3.0% - 54.44 (2.2) (1.0) (0.6)
2009 116,006 - 3,5 years - 13.4% 3.0% 100.0% 29.94 (3.0) (0.4) (0.9)
2009 131,000 - 2 years - 0.0% 3.0% 100.0% 31.29 (4.1) (0.8) (2.1)
2010 129,700 - 3,5 years - 13.4% 3.0% 100.0% 38.33 (4.3) - (0.8)
2010 15,000 - 3 years - 0.0% 3.0% 100.0% 38.90 (0.6) - (0.1)
2010 42,000 - 3,3 years - 0.0% 3.0% 75.0% 39.28 (1.2) - (0.1)
Cost of plans recognized in the position “Staff expenses” (€ millions) (6.4) (7.6)
Weighted average exercise price (€) 29.2 28.5
(1) Adjusted in accordance with the capital increase of June 2009 for the plans prior to 2009.
For the record, the number of options granted and their exercise prices were of 640,000 shares at €68.27 (2006 plan), of 560,000 shares at €70.51 (2007 plan)
and of 497,925 shares at €58.24 (2008 plan). In addition, 51,232, 5,000 and 40,000 (2008 plan) free shares were originally granted.
(2) The performance conditions having a low probability of fulfillment, the cost of the plan was assessed at 0.
148 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
Share-based payments management principles
May2003
Oct.2003
May2004
May2005
May2006
Nov.2006
May2007
April2008
August2009
April2010
Nov.2010 Total
Share option
expiration date 05/2013 10/2013 05/2014 05/2015 05/2016 11/2016 05/2017 04/2018 08/2019 04/2020 11/2020 -
Share option
exercise price €26.34 €37.80 €45.49 €53.58 €63.53 €62.31 €65.61 €54.19 €34.54 €46.06 €44.19 -
Number of share
options outstanding
as of 01/01/2009 297,830 31,344 615,500 566,500 573,200 38,625 504,700 494,425 0 0 0 3,122,124
Capital increase
June 2009 (1) 22,231 2,675 45,852 40,160 42,451 5,155 36,689 36,438 - - - 231,651
Number of share
options granted - - - - - - - - 464,000 - - 464,000
Number of share
options exercised (8,362) (113) - - - - - - - - - (8,475)
Number of share
options cancelled - - (15,299) (75,695) (23,262) - (40,832) (15,023) - - - (170,111)
Number of share
options outstanding
as of 01/01/2010 311,699 33,906 646,053 530,965 592,389 43,780 500,557 515,840 464,000 0 0 3,639,189
Number of share
options granted - - - - - - - - - 482,800 82,000 564,800
Number of share
options exercised (70,684) (1,680) (12,029) - - - - - - - - (84,393)
Number of share
options cancelled - - (7,749) (15,693) (52,820) - (19,615) (22,947) (5,000) - - (123,824)
Number of share
options outstanding
as of 12/31/2010 241,015 32,226 626,275 515,272 539,569 43,780 480,942 492,893 459,000 482,800 82,000 3,995,772
Number of share
options exercisable as
of 12/31/2010 241,015 32,226 626,275 515,272 539,569 43,780 480,942 - - - - 2,479,079
Weighted average remaining contractual life (years) 6.0
(1) Adjustment in the number of share options outstanding at the date of the capital increase of June 2009.
The Group’s long-term retention policy comprises the grant of share
options and, since 2008, of conditional free shares. The management
principles of these share-based payments are set by the Board of
Directors upon the Appointments and Compensation Committee’s
recommendations and comprise, aside from the grants made under
the Group’s employee shareholding operations, the main following
characteristics:
Share options. Grants take the form of share options. This form was
judged preferable to share purchase options as it prevents Imerys
from having to tie up its capital before the option exercise period
even opens, in order to acquire on the market the number of shares
needed to fulfill possible option exercises.
Conditional free shares. Free shares are in principle subordinated
and proportional to the achievement of economic and/or financial
performance objectives set by the Board of Directors.
Since 1999, share-based payments plans are annual and the total
number of rights granted each year is adjusted in accordance
with the Group’s overall performance or to specific events. Grants
traditionally take place on the annual shareholders’ meeting. The
actual or likely beneficiaries are the Group’s executives (Chief
Executive Officer, Executive Committee members, business group
and activity management committees, managers of the Group’s main
corporate departments) and, since 2001, the holders of certain key
positions reporting to them, as well as high-potential managers and
employees that make an outstanding contribution to the Group’s
performance.
The following table summarizes the history, status and main
characteristics of the share options plans included in the scope
of standard IFRS 2 on share-based payments, i.e. subsequent to
November 7, 2002.
1492010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
The following table summarizes the history, status and main characteristics of the free shares plans included in the scope of standard IFRS 2
on share-based payments, i.e. subsequent to November 7, 2002.
April2008
April2008
August2009
August2009
August2009
April2010
April2010
Nov.2010 Total
Acquisition date 04/2011 04/2010 08/2013 08/2012 08/2011 04/2014 04/2013 02/2014 -
Number of shares outstanding
as of 01/01/2009 55,857 40,000 0 0 0 0 0 0 95,857
Capital increase June 2009 (1) 4,189 2,984 - - - - - - 7,173
Number of shares granted - - 58,314 57,692 131,000 - - - 247,006
Number of shares acquired - - - - - - - - -
Number of shares cancelled (1,612) - - - - - - - (1,612)
Number of shares outstanding
as of 01/01/2010 58,434 42,984 58,314 57,692 131,000 0 0 0 348,424
Number of shares granted - - - - - 65,425 79,275 42,000 186,700
Number of shares acquired - (42,984) - - - - - - (42,984)
Number of shares cancelled (2,461) - (1,250) - - - - - (3,711)
Number of shares outstanding
as of 12/31/2010 55,973 0 57,064 57,692 131,000 65,425 79,275 42,000 488,429
(1) Adjustment in the number of shares outstanding at the date of the capital increase of June 2009.
Note 9 Other current revenue and expenses
(€ millions) 2010 2009
Other revenue 44.1 32.4
Income on asset disposals 5.0 11.3
Grants received 2.4 2.1
Other expenses (53.0) (36.5)
Net change in operating provisions (13.6) (21.9)
Total (15.1) (12.6)
Revenue 99.3 82.9
Expenses (114.4) (95.5)
150 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
Note 10 Other operating revenue and expenses
(€ millions) 2010 2009
Gain or loss from obtaining or losing control 40.8 11.3
Transaction costs (3.2) -
Profits resulting from bargain purchases 42.8 -
Changes in estimate of the contingent remuneration of the seller (0.2) -
Income from disposal of consolidated businesses 1.4 11.3
Other non-recurring items (53.2) (98.4)
Impairment losses on goodwill (1.0) (7.0)
Impairment losses on restructuring (9.0) (32.3)
Income on non-recurring asset disposals (3.8) -
Restructuring expenses paid (31.4) (53.0)
Change in provisions 0.8 (6.1)
Share in net income of associates out of the recurring business (8.8) -
Other operating revenue and expenses - gross (12.4) (87.1)
Revenue 72.0 50.4
Expenses (84.4) (137.5)
Income taxes 2.7 9.1
Non-recurring foreign exchange gain related to a financial restructuring (1) 10.2 -
Other operating revenue and expenses - net, Group share 0.5 (78.0)
(1) See Note 14.
Other operating revenue and expenses of 2010
The 2010 “Other operating revenue and expenses - net, Group share”
amount to + €0.5 million after income taxes, of which + €12.5 million
with no cash impact and - €12.0 million in cash. The statement of
cash flows splits the latter in - €15.8 million of “Cash flow generated
by other operating revenue and expenses” (operating activities) and
+ €3.8 million of disposals of investments in consolidated entities.
The “Other operating revenue and expenses - net, Group share”
comprise in particular in cash the reclassification in profit or loss of
a cumulated foreign exchange gain of + €10.2 million, realized as a
consequence of a restructuring of the financing of businesses in US
Dollar. The “Other operating revenue and expenses - gross” amount
to - €12.4 million: - €28.3 million in the Performance & Filtration
Minerals business group (of which mainly - €17.8 million with respect
to environmental provisions in Devon (Great Britain) and in Georgia
(United States) and - €8.2 million of goodwill impairment of associates
in China); + €27.4 million in the Pigments for Paper business group
(of which mainly + €42.8 million of negative goodwill in Brazil and
- €9.1 million of impairment of assets in China); - €2.4 million in
the Materials & Monolithics business group (of which - €5.2 million
related to the main restructurings); - €5.5 million in the Minerals
for Ceramics, Refractories, Abrasives & Foundry business group
(of which - €5.1 million related to the main restructurings); and
- €3.6 million in the holdings (of which - €3.2 million of transaction
costs on acquisitions of businesses).
Other operating revenue and expenses of 2009
The “Other operating revenue and expenses - net, Group share”
in 2009 amounted to - €78.0 million after income taxes, of which
- €34.1 million with no cash impact and - €43.9 million in cash.
The “Other operating revenue and expenses - gross” amounted to
- €87.1 million: - €13.1 million in the Performance & Filtration Minerals
business group, - €15.0 million in the Pigments for Paper business
group (of which - €9.2 million related to the main restructurings),
- €8.9 million in the Materials & Monolithics business group (including
in particular for + €11.7 million the disposal result of Planchers Fabre,
an operation of the activity Clay Roof Tiles & Bricks sold in May 2009
and - €11.3 million related to the main restructurings in the activity
Monolithic Refractories), - €48.0 million in the Minerals for Ceramics,
Refractories, Abrasives & Foundry business group (of which related
to restructurings - €16.3 million in the activity Fused Minerals and
- €18.2 million in the activity Minerals for Ceramics) and - €2.1 million
in the holdings.
1512010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
Note 11 Financial instruments
Financial instruments result from contracts whose execution
symmetrically creates a financial asset of one party to the contract
and a financial liability or an equity instrument of the other party.
Financial instruments are related to one of the following categories:
“Available-for-sale financial assets” (investments in non consolidated
entities), “Financial assets and liabilities at fair value through profit
or loss” (marketable securities and derivatives not eligible to hedge
accounting), “Loans and receivables” (trade receivables, tax
receivables other than income taxes, cash and cash equivalents),
or “Financial liabilities at amortized cost” (bonds, bank loans, trade
payables, tax debts other than income taxes, bank overdrafts).
Hedge derivatives are disclosed in a separate column since the
exceptional character of hedge accounting excludes any relation
to one of the above categories. Notes 11, 12, 22.1 and 25.1 present
disclosures on financial instruments in accordance with these
categories. The classification logic of financial instrument assets
(Note 22.1) and liabilities (Note 25.1) transversally applies to their
changes in profit or loss (Notes 11 and 12). For example, “Revenue”
is attached to “Amortized cost” as its counterparts in “Trade
receivables” or “Cash and cash equivalents” belong to that category
in the assets. In addition, in order to enable the reconciliation between
the disclosures and the financial statements, these notes include a
column “Non IAS 39” that includes the following items:
■ non IAS 39 financial assets and liabilities: consolidated
investments (IAS 27), investments measured in accordance with
the equity method (IAS 28), short-term employee benefits assets
and liabilities (IAS 19), share-based payments (IFRS 2), finance
lease liabilities (IAS 17);
■ non financial assets and liabilities: goodwill (IFRS 3), intangible
assets (IAS 38), property, plant and equipment (IAS 16), mining
assets (IFRS 6), inventories (IAS 2), income taxes assets and
liabilities (IAS 12), prepaid expenses (IAS 38), provisions (IAS 37),
defined employee benefits assets and liabilities (IAS 19), grants
(IAS 20).
The tables hereafter disclose the income and expenses before
income taxes recognized in profit or loss and equity by categories
of financial instruments. The balances of “Other financial revenue”
and “Other financial expenses” are further analyzed in Note 12.
152 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
As of December 31, 2010
(€ millions)
Available- for-sale
financial assets
Fair value through profit or loss
Loans and receivables
Financial liabilities at
amortized cost
Hedge derivatives
Non IAS 39 Total
Non derivative
Non hedge derivatives
Fair value
Cash flow
Operating income
Revenue - - - 3,340.4 - - 6.3 - 3,346.7
Raw materials and consumables used - - - - (1,241.0) - 0.6 61.8 (1,178.6)
External expenses - - - - (849.5) - - - (849.5)
Taxes and duties - - - - (41.6) - - - (41.6)
Other current revenue and expenses - - - 29.6 (47.6) - 0.4 2.5 (15.1)
Gain or loss from obtaining or losing control - - - - (3.4) - - 44.2 40.8
Financial income (loss)
Income from securities - 2.7 - - - - - - 2.7
Gross financial debt expense - - (1.2) - (56.5) (2.3) - - (60.0)
Other financial revenue 0.1 - (2.1) 4.8 154.5 7.2 - 47.6 212.1
Other financial expenses (0.1) - (4.1) (0.3) (153.2) (7.3) (0.3) (54.0) (219.3)
Equity
Recognition in equity - - - - - - 18.4 - 18.4
Reclassification in profit or loss - - - - - - (5.9) - (5.9)
Total financial instruments 0.0 2.7 (7.4) 3,374.5 (2,238.3) (2.4) 19.5 - -
of which impairment losses
in profit or loss (0.1) (0.1) - (18.7) - - - (8.0) -
of which reversals of impairment losses
in profit or loss - 0.1 - 9.7 - - - 9.5 -
The columns “Hedge derivatives/Fair value” and “Hedge derivatives/Cash flow” of the above table are analyzed as follows:
(€ millions)
Fair value
Total
Cash flow
Total
Change in fair value of
hedged items
Effective portion
of hedges
Ineffective portion
of hedges
Effective portion
of hedges
Ineffective portion
of hedges
Operating income
Revenue - - - - 6.3 - 6.3
Raw materials and consumables used - - - - 0.6 - 0.6
Other operational revenue and expenses - - - - (0.7) 1.1 0.4
Financial income (loss)
Gross financial debt expense - (2.3) - (2.3) - - -
Other financial revenue - 7.2 - 7.2 - - -
Other financial expenses (7.3) - - (7.3) (0.3) - (0.3)
Profit or loss (7.3) 4.9 0.0 (2.4) 5.9 1.1 7.0
Equity
Recognition in equity - - - - 18.4 - 18.4
Reclassification in profit or loss - - - - (5.9) - (5.9)
Total financial instruments - - - (2.4) - - 19.5
1532010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
As of December 31, 2009
(€ millions)
Available- for-sale
financial assets
Fair value through profit or loss
Loans and receivables
Financial liabilities at
amortized cost
Hedge derivatives
Non IAS 39 Total
Non derivative
Non hedge derivatives
Fair value
Cash flow
Operating income
Revenue - - - 2,779.3 - - (5.6) - 2,773.7
Raw materials and consumables used - - - - (870.9) - (1.5) (153.7) (1,026.1)
External expenses - - - - (674.9) - - - (674.9)
Taxes and duties - - - - (42.6) - - - (42.6)
Other current revenue and expenses - - - 14.7 (34.8) - 1.7 5.8 (12.6)
Gain or loss from obtaining or losing control (1.1) - - - - - - 5.4 4.3
Financial income (loss)
Income from securities - 2.2 - - - - - - 2.2
Gross financial debt expense - - (1.1) - (62.4) (4.2) (3.6) - (71.3)
Other financial revenue 0.5 - 1.2 2.2 74.1 0.7 3.6 38.8 121.1
Other financial expenses - - - (0.1) (85.5) 0.2 (1.5) (48.5) (135.4)
Equity
Recognition in equity - - - - - - 41.0 - 41.0
Reclassification in profit or loss - - - - - - 13.5 - 13.5
Total financial instruments (0.6) 2.2 0.1 2,796.1 (1,697.0) (3.3) 47.6 - -
of which impairment losses
in profit or loss - - - (19.9) - - - - -
of which reversals of impairment losses
in profit or loss 0.2 - - 5.5 - - - - -
The columns “Hedge derivatives/Fair value” and “Hedge derivatives/Cash flow” of the above table are analyzed as follows:
(€ millions)
Fair value
Total
Cash flow
Total
Change in fair value of
hedged items
Effective portion
of hedges
Ineffective portion
of hedges
Effective portion
of hedges
Ineffective portion
of hedges
Operating income
Revenue - - - - (5.6) - (5.6)
Raw materials and consumables used - - - - (1.5) - (1.5)
Other operational revenue and expenses - - - - (1.7) 3.4 1.7
Financial income (loss)
Gross financial debt expense - (4.2) - (4.2) (5.6) 2.0 (3.6)
Other financial revenue (4.9) 5.6 - 0.7 2.4 1.2 3.6
Other financial expenses 7.2 (7.0) - 0.2 (1.5) - (1.5)
Profit or loss 2.3 (5.6) 0.0 (3.3) (13.5) 6.6 (6.9)
Equity
Recognition in equity - - - - 41.0 - 41.0
Reclassification in profit or loss - - - - 13.5 - 13.5
Total financial instruments - - - (3.3) - - 47.6
154 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
Note 12 Financial income (loss)
The tables hereafter disclose the financial income (loss) by categories of financial instruments. A description of the categories of financial
instruments is provided in Note 11.
As of December 31, 2010
(€ millions)
Available- for-sale
financial assets
Fair value through profit or loss
Loans and receivables
Financial liabilities at
amortized cost
Hedge derivatives
Non IAS 39 TotalNon
derivativeNon hedge derivatives Fair value Cash flow
Net financial debt
expense 0.0 2.7 (1.2) 0.0 (56.5) (2.3) 0.0 0.0 (57.3)
Income from securities - 2.7 - - - - - - 2.7
Gross financial debt
expense - - (1.2) - (56.5) (2.3) - - (60.0)
Other financial
revenue and expenses 0.0 0.0 (6.2) 4.5 1.3 (0.1) (0.3) (6.4) (7.2)
Net exchange rate
differences - - - - 6.0 - (0.2) (0.2) 5.6
Expense and revenue
on derivative instruments - - (6.2) - - - - - (6.2)
Expected return on assets
of defined benefit plans - - - - - - - 47.3 47.3
Unwinding of provisions
of defined benefit plans - - - - - - - (50.1) (50.1)
Unwinding of other
provisions - - - - - - - (3.4) (3.4)
Other financial revenue
and expenses - - - 4.5 (4.7) (0.1) (0.1) - (0.4)
Financial income (loss) 0.0 2.7 (7.4) 4.5 (55.2) (2.4) (0.3) (6.4) (64.5)
Revenue 0.1 2.7 (2.1) 4.8 154.5 7.2 - 47.6 214.8
Expenses (0.1) - (5.3) (0.3) (209.7) (9.6) (0.3) (54.0) (279.3)
1552010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
As of December 31, 2009
(€ millions)
Available- for-sale
financial assets
Fair value through profit or loss
Loans and receivables
Financial liabilities at
amortized cost
Hedge derivatives
Non IAS 39 Total
Non derivative
Non hedge derivatives Fair value Cash flow
Net financial debt
expense 0.0 2.2 (1.1) 0.0 (62.4) (4.2) (3.6) 0.0 (69.1)
Income from securities - 2.2 - - - - - - 2.2
Gross financial debt
expense - - (1.1) - (62.4) (4.2) (3.6) - (71.3)
Other financial
revenue and expenses 0.5 0.0 1.2 2.1 (11.4) 0.9 2.1 (9.7) (14.3)
Dividends 0.3 - - - - - - - 0.3
Net exchange rate
differences - - - - (6.0) - - 0.2 (5.8)
Expense and revenue
on derivative instruments - - 1.2 - - 0.9 (2.0) - 0.1
Expected return on assets
of defined benefit plans - - - - - - - 38.5 38.5
Unwinding of provisions
of defined benefit plans - - - - - - - (45.3) (45.3)
Unwinding of other
provisions - - - - - - - (3.1) (3.1)
Other financial revenue
and expenses 0.2 - - 2.1 (5.4) - 4.1 - 1.0
Financial income (loss) 0.5 2.2 0.1 2.1 (73.8) (3.3) (1.5) (9.7) (83.4)
Revenue 0.5 2.2 1.2 2.2 72.1 2.7 3.6 38.8 123.3
Expenses - - (1.1) (0.1) (145.9) (6.0) (5.1) (48.5) (206.7)
156 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
Note 13 Income taxes
Tax consolidation scope
Imerys SA and the majority of its French entities are included in a tax consolidation system that notably enables the Group to offset within the
consolidated group potential profits and losses. No entities entered nor left the French tax consolidation scope in 2010. The tax consolidation
scope includes 28 entities as of December 31, 2010. Tax consolidations also exist in other countries, mainly in the United States, in Great
Britain, in Spain, in Germany and in Italy.
Income taxes recognized in net income
(€ millions) 2010 2009
Payable and deferred income taxes
Income taxes payable (74.7) (43.4)
Income taxes payable for the period (77.7) (39.9)
Income taxes payable - Prior period adjustments 3.0 (3.5)
Deferred taxes (22.1) 6.3
Deferred taxes due to changes in temporary differences (21.7) 6.3
Deferred taxes due to changes in income tax rates (0.4) -
Total (96.8) (37.1)
Income taxes by level of income
Income taxes on current operating income (99.5) (46.2)
Current operating income taxes payable (83.4) (52.8)
Current operating deferred taxes (16.1) 6.6
Income taxes on other operating revenue and expenses 2.7 9.1
Income taxes payable on other operating revenue and expenses 8.7 9.4
Deferred taxes on other operating revenue and expenses (6.0) (0.3)
Total (96.8) (37.1)
Income taxes recognized in equity
(€ millions) 2010 2009
Cash flow hedges 0.2 (0.9)
Income taxes recognized in equity 0.2 0.6
Income taxes reclassified in profit or loss - (1.5)
Translation reserve (7.8) (3.7)
Income taxes recognized in equity (11.3) (3.7)
Income taxes reclassified in profit or loss 3.5 -
Total (7.6) (4.6)
Income taxes paid
The amount of income taxes paid in 2010 amounts to €73.9 million (€17.0 million in 2009).
1572010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
Tax reconciliation excluding non-recurring items
2010 2009
Legal tax rate in France (including surtax and contribution) 34.4% 34.4%
Impact of national rate differences (5.7)% (2.6)%
Impact of permanent differences and tax incentives 0.1% (5.3)%
Impact of unrecognized tax losses utilized (2.2)% (2.0)%
Other income taxes at different rates and bases and impact of rate changes on deferred taxes 1.0% 1.9%
Other (tax credits, tax losses created and unrecognized, tax reassessments and tax provisions, prior period adjustments) 1.3% 1.5%
Effective tax rate on current operating and financial income (loss) (1) 28.9% 27.9%
(1) 28.9% = €99.5 million (income taxes on current operating income) / [€419.0 million (current operating income) - €64.5 million (financial income (loss)) - €10.2 million
(non-recurring reclassification of the translation reserve of foreign net investments - see Note 14)].
Tax reconciliation including non-recurring items
2010 2009
Legal tax rate in France (including surtax and contribution) 34.4% 34.4%
Impact of national rate differences (4.5)% 1.1%
Impact of permanent differences and tax incentives (2.7)% (5.7)%
Impact of unrecognized tax losses utilized (2.4)% (4.3)%
Other income taxes at different rates and bases and impact of rate changes on deferred taxes 1.0% 3.6%
Other (tax credits, tax losses created and unrecognized, tax reassessments and tax provisions, prior period adjustments) 2.5% 18.2%
Effective tax rate on operating and financial income (loss) 28.3% 47.3%
In 2009, the values of the reconciling items expressed in percentages were greater than those of 2010 as a result of the decrease in the bases.
The row “Other” included for 17.0% the impact of the losses created over the period and unrecognized due to their uncertain recovery.
Note 14 Net income, Group share
(€ millions) 2010 2009
Current operating income 419.0 248.9
Financial income (loss) (64.5) (83.4)
Non-recurring foreign exchange gain related to a financial restructuring (10.2) -
Income taxes on current operating income (99.5) (46.2)
Non-controlling interests (4.5) -
Net income from current operations, Group share 240.3 119.3
Other operating revenue and expenses - gross (12.4) -
Non-recurring foreign exchange gain related to a financial restructuring 10.2 (78.0)
Income taxes 2.7 -
Net income, Group share 240.8 41.3
Effective tax rate on current operating income 28.9% 27.9%
A foreign exchange gain of + €10.2 million realized in the 1st half
of 2010 as a consequence of a reorganization of financings of
businesses in US Dollar (Note 10) presents a non-recurring and
significant character. The format of the financial income (loss) does
not allow to present separately such a transaction: this foreign
exchange gain is thus included in the line “Other financial revenue”
of the income statement. In the financial communication indicator
“Net income from current operations, Group share”, this foreign
exchange gain is however excluded to be reclassified in “Other net
operating revenue and expenses, Group share”, so as to stress its
non-recurring and significant character.
158 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
Note 15 Earnings per share
(€ millions) 2010 2009
Numerator
Net income from current operations attributable to ordinary equity holders
used for the calculation of the diluted earnings per share 240.7 119.5
Net income from current operations, Group share 240.3 119.3
Impact of financial income (loss) on share options 0.4 0.2
Net income attributable to ordinary equity holders
used for the calculation of the diluted earnings per share 241.2 41.5
Net income, Group share 240.8 41.3
Impact of financial income (loss) on share options 0.4 0.2
Denominator
Weighted average number of shares used for the calculation of the basic earnings per share (1) 75,405,857 72,054,523
Impact of share option conversion 267,037 93,661
Weighted average number of shares used for the calculation of the diluted earnings per share 75,672,894 72,148,184
Basic earnings per share, Group share (in €)
Net basic earnings per share from current operations 3.19 0.57
Net basic earnings per share 3.19 1.66
Diluted earnings per share, Group share (in €)
Diluted net earnings per share from current operations 3.19 0.57
Diluted net earnings per share 3.18 1.66
(1) Adjusted further to the capital increase of June 2, 2009.
The number of potential ordinary shares taken into account in the
calculation of the diluted earnings per share excludes the share
options out of the money, i.e. those whose exercise price is superior
to the period average market price of the Imerys share (€43.54 as of
December 31, 2010; €33.20 as of December 31, 2009). Potentially
dilutive options of the plans of May 2004 to April 2008 (Note 8) are
thus excluded from the calculation of the diluted earnings per share
as of December 31, 2010 and December 31, 2009.
No significant transaction has changed the number of ordinary
shares and potential ordinary shares between December 31, 2010
and February 15, 2011, date of authorization of issue of the financial
statements by the Board of Directors.
1592010 REGISTRATION DOCUMENT IMERYS
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5
Consolidated financial statements
❚ NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Note 16 Goodwill
Table of changes
(€ millions) 2010 2009
Opening carrying amount 897.5 899.4
Gross amount 902.4 951.3
Impairment losses (4.9) (51.9)
Incoming entities 6.7 4.3
Adjustments and reclassifications - (5.0)
Impairment losses (1) (1.0) (7.0)
Exchange rate differences 47.3 5.8
Closing carrying amount 950.4 897.5
Gross amount 956.3 902.4
Impairment losses (5.9) (4.9)
(1) Impairment losses on goodwill are disclosed in Note 19.
The “Incoming entities” row of the above table is analyzed as follows:
(€ millions) 2010 2009
Changes related to control obtained over the period 3.1 1.2
Changes related to control obtained over prior periods 3.6 3.1
Incoming entities 6.7 4.3
As of December 31, 2010, the row “Acquisitions of investments in consolidated entities after deduction of cash acquired” or the consolidated
statement of cash flows is analyzed as follows:
(€ millions) 2010 2009
Cash paid (70.9) (11.0)
Cost of investments acquired (67.0) (14.4)
Payables on acquisitions of investments (3.9) 3.4
Cash from acquired entities 1.7 0.1
Acquisitions of investments in consolidated entities after deduction of cash acquired (69.2) (10.9)
Incoming entities of the period - Cash paid (60.5) (8.3)
Incoming entities of the period - Cash from acquired entities 1.7 0.1
Incoming entities of the period - Payables on acquisitions of investments 0.3 3.4
Incoming entities of prior periods - Payables on acquisitions of investments (4.1) -
Purchase price adjustments (7.2) (5.8)
Acquisition costs 0.6 (0.3)
Provisional purchase accounting in 2010
PPSA. On July 26, 2010, Imerys acquired 86.16% of the voting
rights of the Brazilian group PPSA and the remainder i.e. 13.84%,
on December 31, 2010. This acquisition was paid in cash. PPSA
produces kaolin for the paper market. After provisional fair value
measurement of mineral reserves, property, plant and equipment
and main provisions, the excess of the fair value of the assets and
liabilities over the acquisition cost amounts to €42.8 million and was
recognized in other operating revenue and expenses.
160 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
Others. Aside from the significant acquisition of the Pigments for Paper business group, the three other business groups performed some
acquisitions, whose total amount of €6.4 million results in a provisional goodwill of €3.1 million as of December 31, 2010.
The fair values of assets, liabilities and contingent liabilities of the businesses whose purchase accounting is finalized in 2010 present the
following amounts:
(€ millions) PPSA Others Total
Consideration transferred by the Group 54.1 6.4 60.5
Interest held before control was obtained - - -
Cash remitted to the seller when control was obtained 54.1 6.4 60.5
Investment of non-controlling interests 0.0 0.0 0.0
Shareholders’ investment 54.1 6.4 60.5
Assets - non-current 98.3 1.5 99.8
Intangible assets - 0.4 0.4
Property, plant and equipment 91.1 1.1 92.2
Other receivables 1.0 - 1.0
Deferred tax assets 6.2 - 6.2
Assets - current 38.0 3.1 41.1
Inventories 19.0 0.5 19.5
Trade receivables 10.1 0.6 10.7
Other receivables 8.9 0.1 9.0
Marketable securities and other financial assets - 0.2 0.2
Cash and cash equivalents - 1.7 1.7
Liabilities - non-current (25.3) (0.7) (26.0)
Provisions for employee benefits (0.1) (0.1) (0.2)
Other provisions (10.0) (0.6) (10.6)
Deferred tax liabilities (15.2) - (15.2)
Liabilities - current (14.1) (0.6) (14.7)
Trade payables (6.6) (0.1) (6.7)
Income taxes payable (2.5) (0.1) (2.6)
Other debts (5.0) (0.4) (5.4)
Identifiable net asset 96.9 3.3 100.2
Goodwill (42.8) 3.1 (39.7)
Profits resulting from bargain purchases (42.8) - (42.8)
Goodwill, Group share - 3.1 3.1
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Consolidated financial statements
Table of changes
(€ millions) Software
Trademarks, patents
and licensesMining and
use rights Other Total
Carrying amount as of January 1, 2009 11.5 5.2 13.8 14.5 45.0
Gross amount 50.4 12.9 14.2 27.2 104.7
Amortization and impairment losses (38.9) (7.7) (0.4) (12.7) (59.7)
Incoming entities - - 4.3 (0.5) 3.8
Acquisitions 1.1 0.4 0.3 1.1 2.9
Net increases in amortization (5.5) (0.4) (0.1) (0.9) (6.9)
Impairment losses - (2.0) - (0.3) (2.3)
Reclassification and other 1.4 (0.8) 0.1 1.1 1.8
Exchange rate differences (0.3) - (0.1) (0.1) (0.5)
Carrying amount as of January 1, 2010 8.2 2.4 18.3 14.9 43.8
Gross amount 52.2 11.8 18.8 28.8 111.6
Amortization and impairment losses (44.0) (9.4) (0.5) (13.9) (67.8)
Incoming entities - - (3.5) 0.4 (3.1)
Acquisitions 0.7 3.4 0.4 1.9 6.4
Disposals - - - (0.2) (0.2)
Net increases in amortization (5.0) (0.6) (0.2) (1.6) (7.4)
Impairment losses - - - (8.9) (8.9)
Reclassification and other 0.9 (1.9) 1.2 1.2 1.4
Exchange rate differences 0.4 0.2 0.7 1.3 2.6
Carrying amount as of December 31, 2010 5.2 3.5 16.9 9.0 34.6
Gross amount 55.4 13.5 20.8 33.7 123.4
Amortization and impairment losses (50.2) (10.0) (3.9) (24.7) (88.8)
Emission rights
Imerys is concerned, mainly for its production activity of roof tiles and
bricks of the business group Materials & Monolithics, by the European
directive no. 2003/87/CE dated October 13, 2003 which establishes
within the Community a market for emission rights of greenhouse
gases. In 2010, over the third period of the second phase of the
European market (2008-2012), Imerys uses 79.8% of the greenhouse
gas emission quotas granted to the sites concerned in Europe (58.1%
in 2009). The relatively low level in 2009 was mainly explained by the
slowdown in the activity. Since the actual emissions of the Group
are inferior to the authorized level, no provision is recognized as of
December 31, 2010.
As part of its ordinary activities, Imerys uses intangible assets
whose consumption is represented by amortization. The Executive
Management estimates that for most of these assets, the best
estimate of this consumption is reflected by the straight-line mode
over the following useful lives:
■ software: 1 to 5 years;
■ trademarks, patents and licenses: 5 to 40 years.
However, the Executive Management considers that straight-line
depreciation is inappropriate to reflect the consumption of intangible
assets related to mining activity such as mining rights, prepaid leases
and certain use rights. Their amortization is thus estimated in units of
production on the basis of actual extraction. The rights held to justify
the greenhouse gases emissions of the Group are not amortizable.
Note 17 Intangible assets
Estimates
162 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
Note 18 Property, plant and equipment
As part of its ordinary activities, Imerys uses property, plant and
equipment whose consumption is represented by depreciation. The
Executive Management estimates that for most of these assets, the
best estimate of this consumption is reflected by the straight-line
mode over the following useful lives, reflecting where necessary, the
useful lives of the components:
■ office buildings: 10 to 50 years;
■ industrial buildings: 10 to 30 years;
■ improvements to office and industrial buildings: 5 to 15 years;
■ machinery, tooling, facilities and equipment: 5 to 20 years;
■ vehicles: 2 to 5 years.
However, the Executive Management considers that straight-line
depreciation is inappropriate to reflect the consumption of property,
plant and equipment related to mining activity such as mineral
reserves and overburden assets, as well as certain industrial assets
of discontinuous use. Their depreciation is thus estimated in units
of production on the basis of actual extraction for mining assets
or, for these industrial assets, of operational follow-up units such
as production or operating hours. Subsoil, i.e. the surface of land
excluding mineral deposit, is not depreciated since it is not consumed
by mining activity.
Table of changes
(€ millions) Mining assetsLand and buildings
Plant and equipment
Down paymentsand assets under
construction Other Total
Carrying amount as of January 1, 2009 395.6 281.8 864.8 130.1 37.3 1,709.6
Gross amount 546.5 465.7 2,591.7 130.2 167.3 3,901.4
Depreciation and impairment losses (150.9) (183.9) (1,726.9) (0.1) (130.0) (2,191.8)
Incoming entities (3.7) (2.6) (1.4) - 0.8 (6.9)
Acquisitions 22.6 3.7 37.4 39.1 4.1 106.9
Disposals 0.2 (5.6) (9.4) 0.1 (0.1) (14.8)
Net increases in depreciation (24.4) (13.1) (119.8) (0.5) (10.2) (168.0)
Impairment losses (8.3) (0.3) (20.3) (0.5) (0.9) (30.3)
Reversals of impairment losses - - 7.4 - - 7.4
Reclassification and other 1.0 9.0 99.9 (115.8) 0.3 (5.6)
Exchange rate differences (5.8) (8.2) 15.1 1.9 - 3.0
Carrying amount as of January 1, 2010 377.2 264.7 873.7 54.4 31.3 1,601.3
Gross amount 544.9 456.2 2,670.5 55.5 167.8 3,894.9
Depreciation and impairment losses (167.7) (191.5) (1,796.8) (1.1) (136.5) (2,293.6)
Incoming entities 61.0 5.4 24.0 - 1.8 92.2
Acquisitions 25.2 4.3 38.4 62.7 12.4 143.0
Disposals (0.1) (2.5) (4.9) (0.2) (0.6) (8.3)
Net increases in depreciation (32.2) (12.8) (132.0) - (10.8) (187.8)
Impairment losses (0.1) (1.3) (2.1) (0.2) - (3.7)
Reversals of impairment losses - 0.2 3.4 - - 3.6
Reclassification and other (0.9) 7.4 34.7 (51.2) 2.3 (7.7)
Exchange rate differences 23.4 19.7 59.3 4.4 1.7 108.5
Carrying amount as of December 31, 2010 453.5 285.1 894.5 69.9 38.1 1,741.1
Gross amount 655.9 497.9 2,845.5 71.1 183.1 4,253.5
Depreciation and impairment losses (202.4) (212.8) (1,951.0) (1.2) (145.0) (2,512.4)
Finance leases
Property, plant and equipment controlled under finance lease are
recognized as assets for an amount of €3.3 million as of December 31,
2010 (€4.1 million as of December 31, 2009). It essentially relates to
freight material. Commitments for future finance lease rent payments
amount to €3.2 million, of which €0.5 million for 2011, €1.7 million
from 2012 to 2016 and €1.0 million beyond.
Estimates
1632010 REGISTRATION DOCUMENT IMERYS
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5
Consolidated financial statements
Note 19 Impairment losses
Judgments
Cash-Generating Units (CGUs). The allocation of assets and goodwill to the CGUs qualifies as a judgment of the Executive Management. As
disclosed in the following table, goodwill is present in almost all CGUs. This makes the systematic performance of an annual test mandatory
on each of these CGUs.
(€ millions)
2010 2009
Carrying amountGross amount Write-down Carrying amount
Performance Minerals North America 5.3 - 5.3 5.0
Minerals for Filtration North America 53.7 - 53.7 49.8
Performance & Filtration Minerals Europe 71.8 - 71.8 71.1
Performance & Filtration Minerals South America 11.1 - 11.1 10.5
Performance & Filtration Minerals Asia Pacific 5.1 - 5.1 4.8
Vermiculite - - - -
Pigments for Paper 164.9 - 164.9 153.5
Clay Roof Tiles & Bricks 5.5 - 5.5 3.7
Monolithic Refractories 162.3 - 162.3 154.6
Kiln Furniture 32.0 - 32.0 32.0
Minerals for Ceramics 108.7 (5.6) 103.1 94.4
Minerals for Refractories 56.7 - 56.7 52.3
Fused Minerals 255.1 (0.3) 254.8 242.7
Graphite 23.4 - 23.4 22.4
Goodwill of the CGUs 955.6 (5.9) 949.7 896.8
Holdings 0.7 - 0.7 0.7
Total 956.3 (5.9) 950.4 897.5
Impairment loss indicators. The trigger events of an impairment
test qualify as judgments of the Executive Management. These are
mainly significant changes in business, interest rates, technological
level, obsolescence and level of performance of assets. The adverse
evolution of one of these indices requires the immediate performance
of an impairment test, either on a CGU, or on an individual asset.
Estimates
Recoverable amount. It is the higher between the fair value less
costs to sell and the value in use of a CGU or individual asset. In
practice, fair value is reliably determinable only for individual assets
and then corresponds to prices of recent transactions on disposals
of similar assets. The value in use qualifies as the most frequently
used measurement basis for both CGUs and individual assets. The
forecasted cash flows used to estimate it result from the 2010-2014
strategic plan whose last period is extrapolated at a rate of 1.0% to
2.0% in a perpetual growth model.
Discount rate. The average discount rate used to calculate the value
in use is determined from the weighted average cost of capital of
groups comparable to Imerys present of the industrial minerals
sector. This rate, of 8.0% (8.0% in 2009), is adjusted in accordance
with the tested assets by a country-market risk premium of 0 to + 150
basis points. The average discount rate after income taxes amounts
to 8.3% in 2010 (8.2% in 2009). The calculations performed after
income taxes are identical to those that would be performed with
cash flows and rates before income taxes, as required by applicable
texts.
Annual test of CGUs
The systematic performance of this annual test on each of the CGUs
is mandatory as a consequence of the presence of goodwill in almost
all CGUs. In 2010, this test requires the recognition of an impairment
loss of goodwill of €1.0 million in the CGU Minerals for Ceramics of
the business group Minerals for Ceramics, Refractories, Abrasives
& Foundry. This impairment loss is recognized in “Other operating
revenue and expenses” (Note 10). In 2009, this test had required
the recognition of an impairment loss of goodwill of €7.0 million,
of which €2.4 million in the CGU Vermiculite of the business group
Performance & Filtration Minerals and €4.6 million in the CGU
Minerals for Ceramics of the business group Minerals for Ceramics,
Refractories, Abrasives & Foundry.
Sensitivity of the annual test of CGUs to the changes in forecasted cash flows and discount rates.
Scope. Assets of the CGUs net of accumulated depreciation and impairment losses recognized up to December 31, 2010.
Variables. Decrease of 5.0% in forecasted cash flows and increase of 100 basis points in discount rates.
Results. A decrease of 5.0% in forecasted cash flows would not require the recognition of any impairment loss. An increase of 100 basis
points in discount rates would not require the recognition of any impairment loss.
164 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
(€ millions) 2010 2009
Opening carrying amount 50.0 50.0
of which carrying amount of goodwill 7.1 3.4
Income (3.1) (0.1)
Dividends paid out (2.3) (4.3)
Other 9.8 4.4
Closing carrying amount 54.4 50.0
of which carrying amount of goodwill 3.9 7.1
Imerys only has a significant influence on the decisions of financial and operational management of the entities below, these being controlled
by the other associates. The share in net income of associates contributes to operating income since 2009 in accordance with the voluntary
change in accounting method recalled in Note 2. As of December 31, 2010, the share in net income of associates recognized in operating income
amounts to - €3.1 million (- €0.1 million as of December 31, 2009), of which €5.7 million in current operating income (- €0.1 as of December 31,
2009) and - €8.8 million in other operating revenue and expenses (nil as of December 31, 2009).
2010 2009
Share in capital held
(%)
Share in equity
(€M)
Share in net income
(€M)
Share in capital held
(%)
Share in equity
(€M)
Share in net income
(€M)
MST Mineralien Schiffahrt 50.0% 30.0 5.4 50.0% 24.8 (0.3)
Calderys Iberica Refractarios 49.9% 6.1 0.5 49.9% 5.7 0.2
Other investments - 18.3 (9.0) - 19.5 -
Total - 54.4 (3.1) - 50.0 (0.1)
The table below presents the key figures of the main entities under significant influence of Imerys. The data of the most important entity, MST
Mineralien Schiffahrt, stem from the most recent financial statements to which the Group has access, i.e. those of the September 30 annual
closing.
(€ millions)
2010 2009
Assets Revenue Assets Revenue
MST Mineralien Schiffahrt 143.2 95.7 114.7 72.7
Calderys Iberica Refractarios 16.5 20.8 19.3 19.3
Tests of individual assets
Impairment indicators may require the immediate performance of
this test in case of an unfavorable evolution, in addition to the test
carried out on CGUs. The resulting impairment losses recognized in
2010 amount to €12.6 million, of which €1.0 million in the holdings,
€9.9 million on the business group Pigments for Paper, €1.0 million
on the business group Materials & Monolithics and €0.7 million on
the business group Minerals for Ceramics, Refractories, Abrasives
& Foundry. These impairment losses, recognized in “Other operating
revenue and expenses”, have an impact on the industrial tool of
the business groups. Furthermore, the reversals of impairment
losses recognized in 2010 amount to €3.6 million. The impairment
losses net of reversals thus result in an amount of - €9.0 million in
“Other operating revenue and expenses” (Note 10). In 2009, the
tests of individual assets had required the recognition of impairment
losses for an amount of €32.7 million, of which €6.6 million on the
business group Performance & Filtration Minerals, €7.0 million on
the business group Pigments for Paper, €3.9 million on the business
group Materials & Monolithics and €15.2 million on the business
group Minerals for Ceramics, Refractories, Abrasives & Foundry.
Note 20 Investments in associates
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5
Consolidated financial statements
Note 21 Inventories
(€ millions)
2010 2009
Gross amount Write down
Carrying amount
Gross amount Write down
Carrying amount
Raw materials 223.0 (10.8) 212.2 177.2 (10.7) 166.5
Work in progress 59.8 (0.3) 59.5 50.0 (0.3) 49.7
Finished goods 246.8 (9.3) 237.5 201.8 (9.9) 191.9
Merchandises 37.4 (1.5) 35.9 34.3 (1.9) 32.4
Total 567.0 (21.9) 545.1 463.3 (22.8) 440.5
Note 22 Financial assets
22.1 Categories of financial assets
The tables hereafter enable to evaluate the significance of financial instruments with respect to consolidated assets. The categories used to
present the carrying amounts of financial instruments are explained in Note 11. These carrying amounts are representative of fair value.
As of December 31, 2010
(€ millions)
Available- for-sale
financial assets
Fair value through profit or loss
Loans and receivables
Hedge derivatives
Non IAS 39 Total
Non derivative
Non hedge derivatives
Fair value
Cash flow
Non-current assets
Available-for-sale financial assets 7.4 - - - - - - 7.4
Other financial assets - - - 6.5 - - 27.2 33.7
Other receivables - - - 42.0 - - 3.0 45.0
Derivative financial assets - - - - 24.8 - - 24.8
Current assets
Trade receivables - - - 446.5 - - - 446.5
Other receivables - - - 93.3 - - 34.7 128.0
Derivative financial assets - - - - - 12.2 - 12.2
Marketable securities and other financial assets - 6.0 - - - - - 6.0
Cash and cash equivalents - - - 352.1 - - - 352.1
Total financial assets 7.4 6.0 0.0 940.4 24.8 12.2 - -
166 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
As of December 31, 2009
(€ millions)
Available- for-sale
financial assets
Fair value through profit or loss
Loans and receivables
Hedge derivatives
Non IAS 39 Total
Non derivative
Non hedge derivatives
Fair value
Cash flow
Non-current assets
Available-for-sale financial assets 7.5 - - - - - - 7.5
Other financial assets - - - 6.4 - - 16.8 23.2
Other receivables - - - 43.5 - - 0.2 43.7
Derivative financial assets - - - - 17.6 - - 17.6
Current assets
Trade receivables - - - 364.4 - - - 364.4
Other receivables - - - 69.2 - - 41.5 110.7
Derivative financial assets - - 2.1 - - 2.9 - 5.0
Marketable securities and other financial assets - 5.6 - - - - - 5.6
Cash and cash equivalents - - - 264.6 - - - 264.6
Total financial assets 7.5 5.6 2.1 748.1 17.6 2.9 - -
22.2 Available-for-sale financial assets
(€ millions) 2010 2009
Opening balance 7.5 7.1
Changes in the scope of consolidation (0.1) -
Acquisitions - 0.3
Disposals - (0.2)
Changes in fair value - 0.3
Closing balance 7.4 7.5
22.3 Receivables and other financial assets
(€ millions)
Other non-current financial assets
Other non-current receivables
Trade receivables
Other current receivables Total
Carrying amount as of January 1, 2009 13.8 40.4 523.3 154.2 731.7
Gross amount 15.9 62.9 542.8 170.3 791.9
Write-down (2.1) (22.5) (19.5) (16.1) (60.2)
Changes in the scope of consolidation - - 1.0 (0.5) 0.5
Net change 0.8 2.5 (147.4) (37.7) (181.8)
Write-down (0.1) (3.6) (20.3) (7.6) (31.6)
Other 8.0 3.0 2.5 (1.1) 12.4
Exchange rate differences 0.7 1.4 5.3 3.4 10.8
Carrying amount as of January 1, 2010 23.2 43.7 364.4 110.7 542.0
Gross amount 25.4 76.0 402.2 120.8 624.4
Write-down (2.2) (32.3) (37.8) (10.1) (82.4)
Changes in the scope of consolidation - 1.0 10.7 9.0 20.7
Net change (1.7) 2.4 39.1 33.9 73.7
Write-down (0.2) (9.3) 8.3 (21.0) (22.2)
Other 10.8 2.7 - (13.1) 0.4
Exchange rate differences 1.6 4.5 24.0 8.5 38.6
Carrying amount as of December 31, 2010 33.7 45.0 446.5 128.0 653.2
Gross amount 36.1 114.5 473.9 152.9 777.4
Write-down (2.4) (69.5) (27.4) (24.9) (124.2)
1672010 REGISTRATION DOCUMENT IMERYS
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5
Consolidated financial statements
Other non-current financial assets correspond to loans and
deposits for €6.5 million as of December 31, 2010 (€6.4 million
as of December 31, 2009) and to assets related to employee
benefits for €27.2 million as of December 31, 2010 (€16.8 million
as of December 31, 2009) (Note 24.1). The greater part of other
non-current receivables and related write-down corresponds to
tax receivables other than income taxes in Brazil. Other current
receivables also mainly correspond to tax receivables other than
income taxes. In addition, the Group has set up in September 2009
a factoring contract without recourse for an unlimited duration. Since
the object of this contract is to transfer the trade receivables of
certain customers to the factor as well as the entire related risks and
rewards, these receivables are derecognized. As of December 31,
2010, they represent an amount of €71.0 million (€83.0 million as of
December 31, 2009).
22.4 Management of risks arising from financial assets
Credit risk
Description of the risk. The credit risk is the risk that a debtor of Imerys does not reimburse his debt at the due date. This risk mainly has an
impact on the category of loans and receivables.
Management of the risk. The credit risk is followed at the level of each entity. This follow up mainly bases on the analysis of past due receivables
and can be extended to a more detailed solvency investigation. The Group entities may hedge the credit risk through credit insurance contracts
or warranties (Note 30). At the closing date, loans and receivables are reduced to their recoverable amount by an individual write-down. As of
December 31, 2010, loans and receivables are written-down by €124.2 million (€82.4 million as of December 31, 2009). The maximum exposure
of Imerys to credit risk before credit insurance and warranties, i.e. the carrying amount of its receivables, thus amounts to €653.2 million
(€542.0 million as of December 31, 2009).
The table hereafter presents the change in write-down of loans and receivables:
(€ millions)
Other non-current financial assets
Other non-current receivables
Trade receivables
Other current receivables Total
Balance as of January 1, 2009 (2.1) (22.5) (19.5) (16.1) (60.2)
Changes in the scope of consolidation - - 1.9 0.2 2.1
Increases (0.1) (5.2) (25.6) (7.6) (38.5)
Utilizations - 1.5 5.4 - 6.9
Other - - (0.5) 14.7 14.2
Exchange rate differences - (6.1) 0.5 (1.3) (6.9)
Balance as of January 1, 2010 (2.2) (32.3) (37.8) (10.1) (82.4)
Changes in the scope of consolidation - (23.0) - - (23.0)
Increases (0.3) (11.4) (1.3) (20.9) (33.9)
Utilizations 0.1 2.1 9.6 0.1 11.9
Other - - 4.4 7.6 12.0
Exchange rate differences - (4.9) (2.3) (1.6) (8.8)
Balance as of December 31, 2010 (2.4) (69.5) (27.4) (24.9) (124.2)
Trade receivables do not bear interest and are generally due between 30 to 90 days. Some trade receivables may be past due without being
impaired, for example where hedged by a credit insurance contract or a warranty.
(€ millions) 2010 2009
Past due trade receivables that are not impaired 73.6 88.5
Since less than 30 days 42.5 54.4
Since 30 to 89 days 14.1 20.2
Since 90 days and more 17.0 13.9
Undue trade receivables and past-due and impaired trade receivables 372.9 275.9
Total 446.5 364.4
Transactional currency risk
Description of the risk. The transactional currency risk is the risk
whereby a cash flow labeled in foreign currency may be subject to
a deterioration caused by an unfavorable change in its counterpart
in functional currency. In the assets, the transactional currency risk
has an impact mainly on trade receivables.
Management of the risk. In the assets, the transactional currency
risk is managed in accordance with the same principles as the
transactional currency risk related to financial liabilities (Note 25.5
- Transactional currency risk).
168 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
Note 23 Capital
Number of shares outstanding
(€ millions) 2010 2009
Number of shares outstanding at the opening 75,389,496 62,786,590
Capital increases 256,286 12,602,906
Capital decreases (171,627) -
Number of shares outstanding at the closing 75,474,155 75,389,496
Capital management principles
The management of capital presents three main fields: consolidated
equity, share-based payments and share repurchases. The
management of consolidated equity pursues the objective to
maintain a stable financial structure so as to generate dividends for
shareholders through a regular and steady growth of results. The
share options and free shares granted to certain key employees
aim at promoting their loyalty to reach this objective. The objective
of share repurchases is to foster the liquidity of transactions and
regularity of quotation of the Imerys share, to make certain share-
based payments and to perform the cancellations necessary to offset
the dilution impact on the shareholders of share options and free
shares grants.
Consolidated equity corresponds to the capital and premiums of
Imerys SA and consolidated income and reserves. There are no
hybrid instruments combining the characteristics of liabilities and
equity instruments. As of December 31, 2010:
■ consolidated equity amounts to €2,196.4 million (€1,855.8 million
as of December 31, 2009) on the basis of which the Board of
Directors proposes a dividend per share of €1.20 (€1.00 in 2009);
■ 4,170,563 share options and 488,429 free shares representing
5.81% of the capital of Imerys SA after dilution are attributed and
not exercised or acquired (5.40% of the capital after dilution as
of December 31, 2009);
■ Imerys SA holds, at the end of the purchase, sale and cancellation
transactions of the period 136,373 Imerys shares (250 as of
December 31, 2009).
The capital of Imerys SA is subject to several mandatory requirements
of the French Code of Commerce. These requirements do not have
any significant impact on the financial statements. However their
compliance is subject to specific verifications whose conclusions
are disclosed in the Statutory Auditors’ Report. Furthermore, part
of the Group’s financing is ensured through liabilities instruments
whose external issuers impose the compliance to ratios, some of
which using the amount of consolidated equity. These ratios as well
as their amounts at the closing date are presented in Note 25.5 -
Borrower’s liquidity risk.
Period activity
■ On April 29, 2010, the Board of Directors decided to create 42,984
new shares and thus to increase the Company’s share capital by
a nominal amount of €85,968 by incorporation of reserves, with
a view to serving an equivalent number of free shares definitely
acquired on that date.
■ On December 16, 2010, the Board of Directors, as part of the
share buy-back programs authorized by the Shareholders’
General Meetings of April 29, 2009 and April 29, 2010, cancelled
171,627 self-held shares directly acquired on the market by the
Company and totally allocated to the cancellation objective. This
cancellation of shares led to a capital decrease of the Company
by a nominal amount of €343,254.
■ On January 10, 2011, the Chief Executive Officer, pursuant to the
delegation of powers given to him by the Board of Directors on
December 16, 2010, noted that, on December 31, 2010, the share
capital had been increased by a nominal amount of €426,604 as
a result of the exercise in 2010 of 213,302 share options giving
the right to the same number of Imerys shares.
As a result of those operations, Imerys’ fully-paid up share capital
as on December 31, 2010 totaled €150,948,310; it was made up of
75,474,155 shares with €2 par value of which 36,897,864 enjoyed
double voting rights pursuant to article 22 of Imerys’ by-laws. Finally,
the total number of theoretical voting rights attached to existing shares
was 112,372,019. Share capital did not change and the number of
voting rights did not change significantly between December 31,
2010 and the date of the present Registration Document. No directly
registered shares have been pledged by the Company.
1692010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
Note 24 Provisions
24.1 Provisions for employee benefits
(€ millions) 2010 2009
Retirement plans 70.8 76.6
Medical plans 13.6 12.9
Other long-term benefits 7.3 6.0
Termination benefits 3.0 8.4
Total 94.7 103.9
Sensitivity of the 2011 net expense to a change in discount rate on the plans in Pound Sterling.
Scope. Entirety of plans in Pound Sterling, i.e. 66.1% of the Group’s obligations at the closing date.
Variables. Increase of 50 basis points (respectively decrease of 50 basis points) in the discount rate.
Results. Increase of €0.5 million (respectively increase of €0.4 million) in the 2011 net expense.
Sensitivity of the 2011 net expense to a change in discount rate on the plans in US Dollar.
Scope. Entirety of plans in US Dollar, i.e. 20.7% of the Group’s obligations at the closing date.
Variables. Increase of 50 basis points (respectively decrease of 50 basis points) in the discount rate.
Results. Decrease of €0.5 million (respectively increase of €0.8 million) in the 2011 net expense.
Sensitivity of the total of current service cost and interest cost on the one hand and the obligation of medical defined benefit plans on the
other hand to the change in the medical cost trend rates.
Scope. Entirety of medical defined benefits plans, i.e. 1.1% of the Group’s obligations at the closing date.
Variables. Increase of 100 basis points (respectively decrease of 100 basis points) in the medical cost trend rates.
Results. Insignificant increase (respectively decrease of €0.1 million) of the total of current service cost and interest cost and increase of
€0.6 million (respectively decrease of €0.5 million) on the obligation of medical defined benefit plans.
Description of the plans
The main defined benefits plans are located in Great Britain, in the
United States and in France. In Great Britain (66.1% of the obligations
as of December 31, 2010), the main plan – Imerys Minerals Limited
Pension Scheme – is closed to the employees hired after January 1,
2005. Employees hired before that date may continue to acquire
rights by year of service to the extent of 1/80 of the average of the 3
last annual salaries. Employees hired after January 1, 2005 benefit
from a defined contributions plan. In the United States (20.7% of the
obligations as of December 31, 2010), most of the employees may
take part to a defined benefit plan whose specificities are defined
by category of employees and by activity. A significant part of the
defined benefits retirement plans has been closed to the employees
hired after January 1, 2010. Besides, the majority of the employees
may take part to a 401(k) defined contributions plan. In France (4.3%
of the obligations as of December 31, 2010), the defined benefit
plans mainly correspond to the retirement indemnities provided by
the collective labor agreements and to the supplementary retirement
plan of the key management personnel (Note 29).
Estimates
The actuarial assumptions used to measure defined benefit plans
(retirement plans, medical plans and other long-term benefits) qualify
as estimates of the Executive Management. On the major monetary
zones, the assumptions hereafter are weighted by the amounts of
obligations or assets, depending upon the item to which they apply.
2010 2009
Euro zone Great Britain United States Euro zone Great Britain United States
Discount rates 4.2% 5.5% 5.5% 4.6% 5.7% 5.7%
Expected rates of return:
❚ on plan assets 3.7% 6.1% 8.0% 3.6% 6.0% 8.0%
❚ on reimbursement rights 4.4% - - 3.9% - -
Expected rates of salary increases 2.9% 3.7% 2.1% 2.7% 3.6% 4.1%
Medical cost trend rates - - 8.0% - - 8.2%
170 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
As of December 31, 2010
(€ millions) Obligations Assets
Unrecognized items
Asset (provision)
Actuarial gains and (losses)
Pastservices
Assetsceiling
Balances as of January 1, 2010 (888.7) 733.0 (72.5) (6.5) 2.0 (78.7)
Plan assets - - - - - 10.9
Reimbursement rights - - - - - 5.9
Provisions - - - - - (95.5)
Unwinding (50.1) - - - - (50.1)
Current service cost (11.1) - - - - (11.1)
Expected return on plan assets - 47.1 - - - 47.1
Expected return on reimbursement rights - 0.2 - - - 0.2
Plan assets ceiling - - - - (1.6) 1.6
Plan amendments (1.4) - - 0.9 - (2.3)
Curtailments 0.5 - 0.1 0.1 - 0.3
Settlements 0.7 (1.0) - - - (0.3)
Actuarial gains and (losses) of post-employment benefits (46.5) 29.5 (11.2) - - (5.8)
Actuarial gains and (losses) of other employee benefits (0.9) - - - - (0.9)
Changes recognized in profit or loss - - - - - (21.3)
Incoming entities (0.3) 0.2 - - - (0.1)
Benefit payments 53.0 (46.9) - - - 6.1
Employer contributions - 32.0 - - - 32.0
Employee contributions (1.8) 1.8 - - - 0.0
Exchange rate differences (38.6) 31.9 (4.3) - 0.1 (2.5)
Balances as of December 31, 2010 (985.2) 827.8 (87.9) (5.5) 0.5 (64.5)
Plan assets - - - - - 20.6
Reimbursement rights - - - - - 6.6
Provisions - - - - - (91.7)
The line “Changes recognized in profit or loss” of the above table is analyzed as follows:
Asset (provision)
Current operating income (16.7)
Net change in the provisions of defined benefit plans 20.5
Contributions to defined benefit plans (37.2)
Other operating revenue and expenses (1.8)
Net change in the provisions of defined benefit plans (0.8)
Contributions to defined benefit plans (1.0)
Financial income (loss) (2.8)
Expected return on assets of defined benefit plans 47.3
Unwinding of provisions of defined benefit plans (50.1)
Changes recognized in profit or loss (21.3)
Tables of changes
The unwinding and the expected return on plan assets and
reimbursement rights contribute to the financial income (loss)
(Note 12) since 2009 in accordance with the voluntary change
in accounting method recalled in Note 2. The effective return on
plan assets (respectively on reimbursement rights) amounts to
€76.1 million (respectively to €0.7 million) as of December 31, 2010
and €70.6 million (respectively to €0.3 million) as of December 31,
2009. The amount recognized in profit or loss corresponds to
the expected return, as disclosed in the tables hereafter. The
difference between expected and effective return contributes to the
unrecognized actuarial gains and losses of the period.
1712010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
As of December 31, 2009
(€ millions) Obligations Assets
Unrecognized items
Asset (provision)
Actuarial gains and (losses)
Pastservices
Assets ceiling
Balances as of January 1, 2009 (750.0) 626.0 (5.4) (3.1) 1.6 (117.1)
Plan assets - - - - - 2.1
Reimbursement rights - - - - - 5.6
Provisions - - - - - (124.8)
Unwinding (45.3) - - - - (45.3)
Current service cost (10.6) - - - - (10.6)
Expected return on plan assets - 38.3 - - - 38.3
Expected return on reimbursement rights - 0.2 - - - 0.2
Plan assets ceiling - - - - 0.3 (0.3)
Plan amendments (5.1) - - (3.3) - (1.8)
Curtailments 0.9 - - - - 0.9
Settlements 0.3 - - - - 0.3
Actuarial gains and (losses) of post-employment benefits (109.3) 32.4 (73.0) - - (3.9)
Actuarial gains and (losses) of other employee benefits (0.1) - - - - (0.1)
Changes recognized in profit or loss - - - - - (22.3)
Outgoing entities 0.2 - - - 0.2
Benefit payments 59.6 (50.7) - - - 8.9
Employer contributions - 53.7 - - - 53.7
Employee contributions (1.8) 1.8 - - - 0.0
Reclassification - (0.4) - - - (0.4)
Exchange rate differences (27.5) 31.7 5.9 (0.1) 0.1 (1.7)
Balances as of December 31, 2009 (888.7) 733.0 (72.5) (6.5) 2.0 (78.7)
Plan assets - - - - - 10.9
Reimbursement rights - - - - - 5.9
Provisions - - - - - (95.5)
The line “Changes recognized in profit or loss” of the above table is analyzed as follows:
Asset (provision)
Current operating income (15.8)
Net change in the provisions of defined benefit plans 39.7
Contributions to defined benefit plans (55.9)
Others 0.4
Other operating revenue and expenses 0.3
Net change in the provisions of defined benefit plans 7.0
Contributions to defined benefit plans (6.7)
Financial income (loss) (6.8)
Expected return on assets of defined benefit plans 38.5
Unwinding of provisions of defined benefit plans (45.3)
Changes recognized in profit or loss (22.3)
172 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
Assets allocation
2010 2009
Shares 41.5% 37.4%
Bonds 51.5% 53.9%
Monetary 3.9% 4.6%
Real estate 3.1% 4.1%
Total 100.0% 100.0%
In 2011, the employer contributions are estimated at €29.9 million.
Funding of obligations and experience adjustments in the long term
The table below analyzes the obligations in accordance with their
financing modes: by assets specific to the plans (plan assets), by
the Group’s own resources (unfunded obligations) and by assets
non specific to the plans (reimbursement rights). Besides, this
table splits the actuarial gains (losses) generated over the period
between experience adjustments (difference between the previous
actuarial assumptions and what has actually occurred, for example
between the expected and actual returns on assets) and changes
in assumptions (changes in certain actuarial assumptions without
possible comparison with any actual value, for example for the
change in the discount rate).
(€ millions) 2010 2009 2008 2007 2006
Funding of obligations
Obligations funded by plan assets (904.0) (817.4) (674.3) (886.9) (937.7)
Plan assets 821.2 727.1 620.4 858.6 870.2
Funded status (82.8) (90.3) (53.9) (28.3) (67.5)
Unfunded obligations (61.6) (52.3) (57.6) (64.6) (63.3)
Obligations funded by reimbursement rights (19.6) (19.0) (18.1) (18.0) (20.6)
Reimbursement rights 6.6 5.9 5.6 5.3 5.4
Experience adjustments and changes in assumptions
Experience adjustments on obligations 1.5 - - - -
Experience adjustments on plan assets 29.0 - - - -
Experience adjustments on reimbursement rights 0.5 - - - -
Experience adjustments 31.0 - - - -
Changes in assumptions (48.9) - - - -
Actuarial gains (losses) of the period (17.9) (77.0) (42.2) 13.5 66.5
1732010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
24.2 Other provisions
(€ millions) 2010 2009
Other non-current provisions 189.6 157.7
Other current provisions 14.4 18.6
Total 204.0 176.3
Estimates
Probability of settlement and amount of the obligation. The probabilities of settlement and the amounts of the obligations are estimated
by the Executive Management with the support of external counsels for the significant litigation and claims. These relate to allegations of
personal or financial injury implicating the civil liability of Imerys and the potential breach of contractual obligations or regulations on employee,
property and environmental issues.
Estimated phasing of future payments
(€ millions) 2011 - 2015 2016 - 2025 2026 and later Total
Management risks 32.3 - - 32.3
Environment, dismantling and restoration 41.1 52.4 30.4 123.9
Legal and social litigation 47.8 - - 47.8
Other provisions 121.2 52.4 30.4 204.0
Discount rates. These rates integrate the time value of money and monetary inflation over the timeline of future payments.
For the main discounted provision (mine sites restoration), the assumptions of the major monetary zones are the following:
2010 2009
Euro zone Great Britain United States Euro zone Great Britain United States
Time value of money 3.4% 4.4% 3.6% 3.8% 4.7% 4.6%
Monetary inflation 1.9% 3.7% 1.3% 0.9% 2.8% 2.9%
Table of changes
(€ millions)
Management risks
Environment, dismantling
and restoration
Legal and social
litigation Total
Balance as of January 1, 2009 37.4 91.3 45.8 174.5
Changes in the scope of consolidation (0.1) 1.5 (2.8) (1.4)
Increases 22.1 5.1 24.5 51.7
Utilizations (16.8) (4.7) (18.1) (39.6)
Non-utilized decreases (2.5) (2.2) (0.2) (4.9)
Unwinding expense - 2.9 0.2 3.1
Reclassification and other (1.2) (0.1) (5.4) (6.7)
Exchange rate differences (0.3) (1.1) 1.0 (0.4)
Balance as of January 1, 2010 38.6 92.7 45.0 176.3
Changes in the scope of consolidation - 5.5 5.1 10.6
Increases 0.9 28.5 16.4 45.8
Utilizations (4.8) (7.5) (13.8) (26.1)
Non-utilized decreases (3.4) (1.6) (7.4) (12.4)
Unwinding expense - 3.2 0.2 3.4
Reclassification and other - (0.8) (0.6) (1.4)
Exchange rate differences 1.0 3.9 2.9 7.8
Balance as of December 31, 2010 32.3 123.9 47.8 204.0
174 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
As of December 31, 2010
(€ millions)
Financial liabilities at amortized cost
Fair value through profit or loss Hedge derivatives
Non IAS 39 TotalNon hedge derivatives Fair value Cash flow
Non-current liabilities
Loans and financial debts 996.1 (6.9) 24.9 - 2.7 1,016.8
Other debts 6.9 - - - 3.3 10.2
Derivative financial liabilities - 5.5 - 9.8 - 15.3
Current liabilities
Trade payables 317.1 - - - - 317.1
Other debts 123.3 - - - 116.5 239.8
Derivative financial liabilities - 1.2 - 0.1 - 1.3
Loans and financial debts 217.1 - - 1.9 0.5 219.5
Bank overdrafts 4.7 - - - - 4.7
Total financial liabilities 1,665.2 (0.2) 24.9 11.8 - -
The fair value of fixed rate bonds included in the position “Loans and financial debts” is superior to their carrying amount by €59.0 million.
Nominal amount(in millions) Maturity Quotation
Interest rateCarrying amount Fair value DifferenceNominal Effective
JPY 7,000.0 9/16/2033 Unlisted 3.40% 3.47% 65.1 84.0 18.9
USD 140.0 8/6/2013 Unlisted 4.88% 4.98% 106.8 117.1 10.3
USD 30.0 8/6/2018 Unlisted 5.28% 5.38% 22.9 26.6 3.7
EUR 300.0 4/25/2014 Listed 5.13% 5.42% 310.6 327.7 17.1
EUR 500.0 4/18/2017 Listed 5.00% 5.09% 517.7 526.7 9.0
Total as of December 31, 2010 (€ millions) 1,023.1 1,082.1 59.0
Note 25 Financial liabilities
25.1 Categories of financial liabilities
The tables hereafter enable to evaluate the significance of financial
instruments with respect to consolidated liabilities. The categories
used to present the carrying amounts of financial instruments are
explained in Note 11. These carrying amounts are representative of
fair value for all instruments except for bonds.
The tables hereafter are followed by an analysis of the differences
between carrying amount and fair value. For listed bonds, fair
value qualifies as a directly observable data since it corresponds
to the market value at the closing date (fair value of level 1). For
unlisted bonds, fair value including accrued interests results from a
model using observable data, i.e. a revaluation of discounted future
contractual flows (fair value of level 2).
1752010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
As of December 31, 2009
(€ millions)
Financial liabilities at amortized cost
Fair value through profit or loss Hedge derivatives
Non IAS 39 TotalNon hedge derivatives Fair value Cash flow
Non-current liabilities
Loans and financial debts 1,024.7 (8.1) 17.6 - 3.5 1,037.7
Other debts 7.7 - - - 1.8 9.5
Derivative financial liabilities - 4.2 - 12.3 - 16.5
Current liabilities
Trade payables 260.7 - - - - 260.7
Other debts 80.0 - - - 105.7 185.7
Derivative financial liabilities - - - 2.9 - 2.9
Loans and financial debts 187.6 - - (2.2) 0.6 186.0
Bank overdrafts 12.1 - - - - 12.1
Total financial liabilities 1,572.8 (3.9) 17.6 13.0 - -
The fair value of fixed rate bonds included in the position “Loans and financial debts” is superior to their carrying amount by €10.3 million.
Nominal amount (in millions) Maturity Quotation
Interest rateCarrying amount Fair value DifferenceNominal Effective
JPY 7,000.0 9/16/2033 Unlisted 3.40% 3.47% 53.1 65.6 12.5
USD 140.0 8/6/2013 Unlisted 4.88% 4.98% 99.1 107.5 8.4
USD 30.0 8/6/2018 Unlisted 5.28% 5.38% 21.3 23.6 2.3
EUR 300.0 4/25/2014 Listed 5.13% 5.42% 310.6 319.6 9.0
EUR 500.0 4/18/2017 Listed 5.00% 5.09% 517.7 495.8 (21.9)
Total as of December 31, 2009 (€ millions) 1,001.8 1,012.1 10.3
25.2 Financial debt
The net financial debt is used in the management of the financial resources of Imerys. This indicator is used in particular in the calculation
of financial ratios that the Group has to comply with under financing agreements entered into with financial markets (Note 25.5 - Borrower’s
liquidity risk).
The link between this indicator and the consolidated statement of financial position is presented in the following table:
(€ millions) Notes 2010 2009
Non-derivative financial liabilities 1,241.0 1,235.8
Loans and financial debts - non-current 1,016.8 1,037.7
Loans and financial debts - current 219.5 186.0
Bank overdrafts 4.7 12.1
Non-derivative financial assets (358.1) (270.2)
Marketable securities and other financial assets (6.0) (5.6)
Cash and cash equivalents (352.1) (264.6)
Hedge derivatives (10.1) (1.3)
Financing hedge instruments - liabilities 25.4 16.7 18.8
Financing hedge instruments - assets 25.4 (26.8) (20.1)
Net financial debt 872.8 964.3
176 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
25.3 Other debts
(€ millions) 2010 2009
Non-current liabilities
Income taxes payable 2.3 1.2
Tax debts - 0.4
Other 7.9 7.9
Total 10.2 9.5
Current liabilities
Capital expenditure payables 43.8 28.7
Tax debts 20.3 19.7
Social debts 114.0 103.3
Other 61.7 34.0
Total 239.8 185.7
25.4 Derivative instruments
Derivative instruments management principles
The use of derivative instruments is framed by a policy defined
and operated by the Group Treasury Department and periodically
presented to the Board of Directors. In accordance with this policy,
derivative instruments are exclusively used to hedge risks related to
operating transactions (transactional foreign exchange and energy
price risks), to foreign investments (conversion of financial statements
risk) and to financing (transactional currency and interest rate risks).
Imerys is not taking any speculative position. Derivative instruments
are negotiated centrally by the Group Treasury Department on over-
the-counter markets with first-rank banking institutions. Imerys
proscribes to its entities to subscribe derivative instruments outside
the Group. The implementation of this policy to the foreign exchange
(transactional currency and conversion of financial statements),
interest rate and energy price risks is developed in Note 25.5.
Derivative instruments in the financial statements
Assets and liabilities. The following table presents the derivative
instruments recognized in the assets and liabilities in accordance
with the hedged risks: foreign exchange, interest rate and energy
price risks. The fair value including accrued interests of derivative
instruments results from a model using observable data, i.e. prices at
the closing date provided by third parties active on financial markets
(fair value of level 2).
(€ millions)
2010 2009
Assets Liabilities Net Assets Liabilities Net
Foreign exchange risk 6.6 1.4 5.2 2.9 2.3 0.6
Forward derivative instruments 6.6 0.1 6.5 0.4 2.3 (1.9)
Optional derivative instruments - 1.3 (1.3) 2.5 - 2.5
Interest rate risk 24.8 15.3 9.5 17.6 16.5 1.1
Forward derivative instruments 24.8 9.8 15.0 17.6 12.3 5.3
Optional derivative instruments - 5.5 (5.5) - 4.2 (4.2)
Energy price risk 5.6 0.0 5.6 2.1 0.6 1.5
Forward derivative instruments - - - - - -
Optional derivative instruments 5.6 - 5.6 2.1 0.6 1.5
Total 37.0 16.7 20.3 22.6 19.4 3.2
Non-current 24.8 15.3 9.5 17.6 16.5 1.1
Current 12.2 1.4 10.8 5.0 2.9 2.1
Operational hedge instruments 10.2 - 10.2 2.5 0.6 1.9
Financing hedge instruments 26.8 16.7 10.1 20.1 18.8 1.3
1772010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
Equity. As part of its policy of management of the foreign exchange,
interest rate and energy price risks, Imerys holds derivative
instruments intended to hedge certain future purchases and sales
in foreign currencies, a portion of its floating rate financing and part
of its future energy consumption in the United States, in Great Britain
and in France. These positions qualify as cash flow hedges. The
following table presents the amounts before income taxes recognized
in equity in this respect as well as the reclassifications in profit or
loss. The detail of these reclassifications at the level of the underlying
revenue and expenses is presented in Note 11. These cash flow
hedges are further outlined in the context of the management of
foreign exchange, interest rate and energy price risks in Note 25.5.
(€ millions)
Foreign exchange rate risk
Interest rate risk
Energy price risk Total
Balance as of January 1, 2009 (25.2) (19.8) (22.6) (67.6)
Recognition in equity 14.7 0.3 26.0 41.0
Reclassification in profit or loss 9.8 5.6 (1.9) 13.5
Balance as of January 1, 2010 (0.7) (13.9) 1.5 (13.1)
Recognition in equity 10.6 4.1 3.7 18.4
Reclassification in profit or loss (6.0) - 0.1 (5.9)
Balance as of December 31, 2010 3.9 (9.8) 5.3 (0.6)
of which reclassification to profit or loss expected in 2011 3.9 (9.8) 5.3 (0.6)
25.5 Management of risks arising from financial liabilities
Transactional currency risk
Description of the risk. The transactional currency risk is the risk
whereby a cash flow labeled in foreign currency may be subject to
a deterioration caused by an unfavorable change in its counterpart
in functional currency.
Management of the risk. Imerys recommends to its operating
entities to perform, to the extent it is possible, their transactions
in their functional currencies. Where this is not possible, the
transactional currency risk may be hedged on an individual basis by
currency forwards, currency swaps and foreign exchange options.
These instruments are used as hedges of highly probable budget
flows. The corresponding hedges qualify as cash flow hedges.
The following table presents the amounts before income taxes
recognized in equity in this respect as well as the reclassifications
in profit or loss.
Sensitivity of derivative instruments to changes in foreign exchange rates.
Scope. Portfolio of foreign exchange derivative instruments held as of December 31, 2010 with respect to highly probable future purchases
and sales transactions in foreign currencies.
Variables. + 10.0% (respectively - 10.0%) on the exchange rates of all foreign currencies of the derivative instruments of the portfolio as of
December 31, 2010.
Results. Decrease in equity of €13.2 million (respectively increase of €13.2 million) corresponding to the change in the effective portion of
the derivative instruments qualified as cash flow hedges and increase of €3.4 million (respectively decrease of €3.4 million) in profit or loss
corresponding to the change in the ineffective portion of the derivative instruments qualified as cash flow hedges and to the change in fair
value of non hedge derivative instruments.
(€ millions) 2010 2009
Opening balance (0.7) (25.2)
Recognition in equity 10.6 14.7
Reclassification in profit or loss (6.0) 9.8
Closing balance 3.9 (0.7)
of which reclassification to profit or loss expected in 2011 3.9 (0.7)
178 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
Interest rate risk
Description of the risk. The interest rate risk is the risk whereby the
interest flow due in relation to the financial debt is deteriorated by a
rise in the market interest rates. The sensitivity analysis presented
hereafter enables to assess the exposure of the Group to this risk.
Management of the risk. The objective of the management of the
interest rate risk consists in guaranteeing its medium-term cost.
The net financial debt is known through a reporting that describes
the financial debt of each entity and indicates its components and
characteristics. This reporting, reviewed monthly by the Financial
Department and quarterly by the Board of Directors, enables the
situation to be monitored and the management policy to be adjusted
as necessary. The management policy is drawn up by the Group
Treasury Department and approved every year by the Financial
Department and the Board of Directors. As part of this process, the
Group Treasury Department works with first-rank banking institutions
and obtains financial data and pricing from information providers.
The policy of Imerys is to obtain financing mainly in Euro, the most
accessible financial resource and at a fixed rate. Medium-term fixed-
rate bond issues are converted to floating rates using interest rate
swaps. Given anticipated trends in interest rates in 2010, the Group
fixed the interest rate for part of its future financial debt (2011-2015)
on various terms.
As of December 31, 2010, Imerys holds a certain number of derivative
instruments intended to hedge a portion of its debt at floating rate.
These instruments include interest rate swaps, options - including
caps, floors, swaptions and futures. These instruments qualify as
cash flow hedges. The following table presents the amounts before
income taxes recognized in equity in this respect as well as the
reclassifications in profit or loss.
(€ millions) 2010 2009
Opening balance (13.9) (19.8)
Recognition in equity 4.1 0.3
Reclassification in profit or loss - 5.6
Closing balance (9.8) (13.9)
of which reclassification to profit or loss expected in 2011 (9.8) (13.9)
Furthermore, Imerys holds as of December 31, 2010 interest rate swaps intended to hedge the exposure to changes in fair value of the different
loans. These instruments qualify as fair value hedges. They hedge the risk of change in the risk-free rate and not the differential corresponding
to the credit risk of the Group. The hedged loans and the derivative instruments present the same characteristics.
Currency Notional amount (in millions) Fixed rate received Floating rate paid
Japanese Yen 7,000 2.39% Libor Yen 6 months
Euro 100 4.32% Euribor 3 months
Euro 100 4.33% Euribor 3 months
US Dollar 140 4.88% Libor USD 3 months
The table hereafter provides a breakdown of the financial net debt between floating and fixed rate by currency as of December 31, 2010.
(€ millions) Euro US Dollar Japanese YenOther foreign
currencies Total
Debt at fixed rate 628.2 25.0 0.7 0.0 653.9
Debt at fixed rate on issue 828.2 129.8 65.1 - 1,023.1
Swap fixed rate into floating rate (200.0) (104.8) (64.4) - (369.2)
Debt at floating rate 66.1 231.6 39.8 (118.6) 218.9
Debt at floating rate on issue 103.2 68.9 14.4 16.6 203.1
Net cash and marketable securities (185.5) (64.0) (7.0) (96.9) (353.4)
Swap fixed rate into floating rate 200.0 104.8 64.4 - 369.2
Exchange rate swap (51.6) 121.9 (32.0) (38.3) 0.0
Net financial debt as of December 31, 2010 694.3 256.6 40.5 (118.6) 872.8
1792010 REGISTRATION DOCUMENT IMERYS
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5
Consolidated financial statements
The table hereafter provides a breakdown of interest rate hedging transactions for the period 2010 by foreign currency.
(€ millions) Euro US Dollar Japanese YenOther foreign
currencies Total
Exposure at floating rate before hedging 66.1 231.6 39.8 (118.6) 218.9
Fixed rate hedges (150.0) (239.5) - - (389.5)
Swap at average rate of 4.04% 3.92% - - -
Exposure at floating rate after hedging (83.9) (7.9) 39.8 (118.6) (170.6)
The table hereafter provides a breakdown of interest rate hedging transactions in 2010 and after by maturity dates.
(€ millions) 2010 2011 - 2015 2016 and later
Total exposure before hedging 218.9 218.9 218.9
Fixed rate hedges (389.5) (264.6) -
Swap at average rate of 2.96% 4.26% -
Total exposure after hedging (170.6) (45.7) 218.9
Sensitivity of financial instruments to changes in interest rates.
Scope. Net financial debt after interest rate derivative instruments as of December 31, 2010.
Variables. Increase of 50 basis points (respectively decrease of 50 basis points) of interest rates, assuming that the net financial debt remains
constant and that each fixed rate debt (respectively floating rate debt) is replaced upon settlement date by a floating rate debt (respectively
fixed rate debt).
Results. Increase in equity of €2.1 million (respectively decrease of €2.2 million) corresponding to the change in the effective portion of
the derivative instruments qualified as cash flow hedges and increase in the financial income (loss) of €1.2 million (respectively decrease of
€1.3 million).
Energy price risk
Description of the risk. The energy price risk is the risk whereby the
cash flow due in relation to an energy purchase may be subject to a
deterioration caused by a rise in its market price. Imerys is exposed
to the price risk of the energies that enter into the production cycle of
its activities, mainly natural gas, electricity and coal to a lesser extent.
Management of the risk. Confronted with the energy price risk, the
geographical locations and supply sources of Imerys are diversified.
The Group strives to pass on energy price increases to the selling
price of its products. Furthermore, the management of the price risk
of natural gas, both in Europe and the United States, is centralized,
the Group Treasury Department being responsible for implementing
the framework and resources needed for the application of a common
management policy, which includes appropriate use of the financial
instruments available in those markets. Since 2006, the Group has
strengthened its research programs on alternative energy sources
as well as its projects on the reduction of energy consumption under
the supervision of a Group Energy Supervisor. Since 2008, energy
managers are designated at site level as well as at activity levels.
The energy price risk is hedged by forward and option contracts.
These instruments qualify as cash flow hedges. The following table
presents the amounts before income taxes recognized in equity in
this respect as well as the reclassifications in profit or loss.
(€ millions) 2010 2009
Opening balance 1.5 (22.6)
Recognition in equity 3.7 26.0
Reclassification in profit or loss 0.1 (1.9)
Closing balance 5.3 1.5
of which reclassification to profit or loss expected in 2011 5.3 1.5
The following table summarizes the positions taken as of December 31, 2010 to hedge the energy price risk.
Net notional amounts (in MWh) Maturities
Underlying position 3,656,416 < 12 months
Management transactions 1,942,533 < 12 months
180 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
Sensitivity of derivative instruments to the change in the prices of natural gas and Brent.
Scope. Portfolio of derivative instruments qualified as cash flow hedges held as of December 31, 2010 with respect to the price risk of
natural gas and Brent.
Variables. + 10.0% (respectively - 10.0%) on the natural gas and Brent indices as of December 31, 2010.
Results. Increase in equity of €4.2 million (respectively decrease of €4.1 million) corresponding to the change in the effective portion of the
derivative instruments qualified as cash flow hedges. The change in the ineffective portion recognized in profit or loss is immaterial.
Borrower’s liquidity risk
Description of the risk. The borrower’s liquidity risk is the risk whereby Imerys would not be in a position to meet the repayment obligations
of its financial liabilities. The maturity on issue as of December 31, 2010 presented hereafter enables to assess the exposure of the Group to
this risk. In this table, the bilateral facilities are posted between 2011 and 2015 in accordance with the maturity of the facilities and not with
that of the utilizations. The foreign exchange swaps included in the financing hedge instruments are posted from 2016 under the assumption
that they will be renewed regularly.
(€ millions)
2011 2012 - 2016 2017 and later
TotalCapital Interests Capital Interests Capital Interests
Non-derivative financial liabilities 66.3 51.7 558.2 221.4 586.9 73.3 1,557.8
Eurobond / EMTN - 40.8 303.0 173.4 500.0 25.0 1,042.2
Private placements - 10.9 104.8 48.0 86.9 48.3 298.9
Commercial paper issues 18.5 - - - - - 18.5
July 2013 syndicated credit - - - - - - 0.0
Bilateral facilities - - 150.4 - - - 150.4
Facilities due within one year 47.8 - - - - - 47.8
Hedge derivatives (10.1) 0.0 0.0 0.0 0.0 0.0 (10.1)
Financing hedge instruments - liabilities 16.7 - - - - - 16.7
Financing hedge instruments - assets (26.8) - - - - - (26.8)
Future cash outflows with respect
to gross financial debt 56.2 51.7 558.2 221.4 586.9 73.3 1,547.7
Non-derivative financial liabilities 4.7 0.0 0.0 0.0 0.0 0.0 4.7
Bank overdrafts 4.7 - - - - - 4.7
Non-derivative financial assets (358.1) 0.0 - - - - (358.1)
Marketable securities and other financial assets (6.0) - - - - - (6.0)
Cash and cash equivalents (352.1) - - - - - (352.1)
Future cash outflows with respect
to gross financial debt (297.2) 51.7 558.2 221.4 586.9 73.3 1,194.3
of which items recognized as of
December 31, 2010 (net financial debt) (297.2) 24.9 558.2 - 586.9 - 872.8
Non-derivative financial liabilities 556.9 0.0 10.2 0.0 0.0 0.0 567.1
Trade payables 317.1 - - - - - 317.1
Other debts 239.8 - 10.2 - - - 250.0
Hedge derivatives (10.2) 0.0 0.0 0.0 0.0 0.0 (10.2)
Operational hedge instruments - liabilities - - - - - - 0.0
Operational hedge instruments - assets (10.2) - - - - - (10.2)
Future cash outflows 249.5 51.7 568.4 221.4 586.9 73.3 1,751.2
1812010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
In addition, a large part of the debt at fixed rate on issue being swapped into floating rate, the maturity of the net financial debt after interest
rate swap is analyzed as follows:
(€ millions) 2011 2012 - 2016 2017 and later Total
Debt at fixed rate 31.4 100.0 522.5 653.9
Debt at fixed rate on issue 31.4 404.8 586.9 1,023.1
Swap fixed rate into floating rate - (304.8) (64.4) (369.2)
Debt at floating rate (303.7) 458.2 64.4 218.9
Debt at floating rate on issue 49.7 153.4 - 203.1
Net cash and marketable securities (353.4) - - (353.4)
Swap fixed rate into floating rate - 304.8 64.4 369.2
Net financial debt (272.3) 558.2 586.9 872.8
Management of the risk. For part of its financing, Imerys is required
to comply with several covenants. The main restrictive terms and
conditions attached to certain bilateral facilities, to part of the bond
issues under private placements and to the syndicated credit are
as follows:
■ purpose: general corporate financing requirement;
■ obligations in terms of financial ratio compliance:
• the ratio consolidated net financial debt / consolidated equity
shall, in accordance with the financing contracts concerned,
be inferior to 1.50 or 1.60 at each half-year or annual closing of
consolidated financial statements. As of December 31, 2010,
the ratio amounts to 0.40 (0.52 as of December 31, 2009),
• the ratio consolidated net financial debt / consolidated EBITDA
of the last 12 months shall, in accordance with the financing
contracts concerned, be inferior to 3.75 or 3.80 at each half-
year or annual closing of consolidated financial statements.
As of December 31, 2010, the ratio amounts to 1.41 (2.32 as
of December 31, 2009);
■ absence of any lien in favor of lenders.
The failure to comply with the above obligations on one of the
financing contracts concerned could lead to the cancellation of its
available amount and, upon demand of the creditor(s) concerned,
make the amount of the corresponding financial debt immediately
callable. Apart from two exceptions, the financing contracts of
the Group do not provide for any cross default with each other in
case of breach of a mandatory covenant applicable to one of these
contracts. As of December 31, 2010, Imerys has a long-term rating
of Baa3 Outlook Positive by Moody’s (Baa3 Outlook Stable as of
December 31, 2009).
As of July 24, 2009, Imerys has updated its new Euro Medium
Term Note program (EMTN) with the Commission de Surveillance
du Secteur Financier (Luxemburg). The program amounts to
€1.0 billion and enables the issue of notes considered as ordinary
bonds of a maturity of 1 month to 30 years. As of December 31,
2010, outstanding securities total €64.4 million (€102.6 million as of
December 31, 2009). Imerys also has a French commercial paper
program limited to €800.0 million (€800.0 million as of December 31,
2009) rated P-3 by Moody’s (P-3 as of December 31, 2009). As
of December 31, 2010, outstanding securities total €18.5 million
(€50.0 million as of December 31, 2009). Imerys has access to
€1,086.6 million of bank facilities (€1,230.1 million as of December 31,
2009), part of which secures the issued commercial paper in
accordance with the financial policy of the Group.
Market liquidity risk
Description of the risk. The market liquidity risk is the risk whereby a
non confirmed financial resource (commercial paper, bank facility and
accrued interests, other debt and facilities) would not be renewed.
Management of the risk. Financial resources are the main
adjustment variable of the financing capacities available to Imerys.
These capacities exist either as drawn financial debt or as financing
commitments granted by first-rank banking institutions. Medium-term
financial resources provided by the bilateral facilities or the syndicated
credit may be used over very short drawing periods (from 1 to 12
months) while remaining available over longer maturities (5 years).
Over the past years, Imerys has sought to maintain the amount of its
financial resources at approximately €2.0 billion (€2,231.7 million as of
December 31, 2010, €2,345.3 million as of December 31, 2009) and
to lengthen their maturity. Imerys manages the amount of its financial
resources by comparing it regularly with the amount of its utilizations
in order to measure by difference the financial liquid borrowings to
which the Group may have access.
182 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
The robustness of financial resources is assessed on the basis of their amounts and average maturity as analyzed hereafter:
(€ millions) 2010 2009
Financial resources by maturity (€ millions)
Maturity less than one year 167.0 134.7
Maturity from one to five years 1,474.8 1,634.2
Maturity beyond five years 589.9 576.4
Total 2,231.7 2,345.3
Financial resources by nature (€ millions)
Bond resources 994.7 1023.6
Eurobond / EMTN 803.0 853.0
Private placements 191.7 170.6
Bank resources 1,237.0 1,321.7
Syndicated credit 750.0 750.0
Miscellaneous bilateral facilities 487.0 571.7
Total 2,231.7 2,345.3
Average maturity of financial resources (in years)
Bond resources 6.1 6.6
Bank resources 2.0 2.9
Total 3.8 4.5
The table below measures the available financial resources after the repayment of financing from uncommitted resources. It measures the real
exposure of Imerys to an illiquidity crisis on both financial and banking markets. As of December 31, 2010, available financial resources, after
repayment of uncommitted resources, total €1,005.5 million (€1,122.9 million as of December 31, 2009), which gives the Group substantial
room to maneuver and a guarantee of financial stability.
(€ millions)
2010 2009
Resources Utilization Available Resources Utilization Available
Bonds 994.7 994.7 - 1,023.6 1,023.6 -
Commercial papers - 18.5 (18.5) - 50.0 (50.0)
Committed bank facilities 1,237.0 150.4 1,086.6 1,321.7 91.6 1,230.1
Bank facilities and accrued interests - 35.6 (35.6) - 32.5 (32.5)
Other debts and facilities - 27.0 (27.0) - 24.7 (24.7)
Total 2,231.7 1,226.2 1,005.5 2,345.3 1,222.4 1,122.9
Conversion of financial statements risk
Description of the risk. The conversion of financial statements
risk is a form of foreign exchange rate risk whereby the value in
Euro of the financial statements of a foreign business may be
subject to a deterioration caused by an unfavorable change in the
foreign exchange rate of the functional currency of that business.
The sensitivity analysis presented hereafter enables to assess the
exposure of the Group to this risk.
Management of the risk. Imerys hedges part of its net investments
in foreign businesses through loans specifically allocated to their long
term financing and by the proportion of its financial debt stated in
foreign currencies. The foreign exchange differences generated by
these loans and financings qualified as hedges of net investments
in foreign entities, are recognized in equity so as to neutralize, to a
certain extent, the gains or losses of translation of the hedged net
investments. As of December 31, 2010, the loans and exchange
rate swaps hedging net investments in foreign entities are the
following: USD 379.8 million, JPY1,000.0 million, CHF35.0 million
and SGD5.5 million (USD 441.0 million, JPY1,000.0 million,
CHF35.0 million and SGD5.5 million as of December 31, 2009).
1832010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
The table below describes the financial debt before and after the impact of these foreign currencies swaps.
(€ millions)
2010 2009
Before exchange rate swap
Exchange rate swap
After exchange rate swap
Before exchange rate swap
Exchange rate swap
After exchange rate swap
Euro 931.4 (51.6) 879.8 919.7 (65.2) 854.5
US Dollar 198.7 121.9 320.6 222.8 32.1 254.9
Japanese Yen 79.5 (32.0) 47.5 67.6 (27.7) 39.9
Other foreign currencies 16.6 (38.3) (21.7) 12.3 60.8 73.1
Total 1,226.2 0.0 1,226.2 1,222.4 0.0 1,222.4
As of December 31, 2010, the portion of the financial debt in each foreign currency, after swap, is as follows:
(€ millions) Euro US Dollar Japanese YenOther foreign
currencies Total
Gross financial debt 879.8 320.6 47.5 (21.7) 1,226.2
Net cash and marketable securities (185.5) (64.0) (7.0) (96.9) (353.4)
Net financial debt as of December 31, 2010 694.3 256.6 40.5 (118.6) 872.8
Sensitivity of foreign exchange swaps to changes in foreign exchange rates.
Scope. Portfolio of foreign exchange swaps qualified as hedges of net investments in foreign entities held as of December 31, 2010.
Variables. + 10.0% (respectively - 10.0%) on the exchange rates of all foreign currencies of the foreign exchange swaps of the portfolio as
of December 31, 2010.
Results. Decrease in equity of €11.9 million (respectively increase of €11.9 million).
Note 26 Deferred taxes
Change in deferred taxes
(€ millions) 2009 Profit or lossTranslation, scope
and reclassification 2010
Deferred tax assets 55.9 (22.2) 11.8 45.5
Deferred tax liabilities (63.6) 0.1 (18.3) (81.8)
Net deferred tax position (7.7) (22.1) (6.5) (36.3)
184 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
Deferred tax breakdown by nature
(€ millions) 2009 Profit or lossTranslation, scope
and reclassification 2010
Deferred tax assets 145.0 (5.9) 11.6 150.7
Provision for employee benefits 12.1 (4.1) (2.7) 5.3
Other provisions 40.7 (17.1) 3.4 27.0
Property, plant and equipment 48.0 3.1 8.6 59.7
Intangible assets (0.3) (0.1) (0.1) (0.5)
Financial assets (5.0) 3.4 (2.8) (4.4)
Current assets and liabilities 19.7 (0.1) 1.8 21.4
Tax losses carried forward 29.5 8.6 (7.8) 30.3
Other 0.3 0.4 11.2 11.9
Deferred tax liabilities (152.5) (16.2) (18.3) (187.0)
Property, plant and equipment (154.6) 15.9 (18.5) (157.2)
Intangible assets (0.4) (0.1) - (0.5)
Financial assets (7.9) 0.5 (0.8) (8.2)
Current assets and liabilities (5.8) (0.3) - (6.1)
Other 16.2 (32.2) 1.0 (15.0)
Net deferred tax position (7.5) (22.1) (6.7) (36.3)
Carried forward tax losses
Deferred tax assets are recognized as carried forward tax losses
when they are assessed as being recoverable. As of December 31,
2010, these deferred tax assets amount to €30.3 million (€29.5 million
as of December 31, 2009). On the other hand, tax losses and
credits not having been recognized as deferred tax assets due
to their uncertain recovery, amount as of December 31, 2010 to
respectively €303.8 million (€154.1 million as of December 31, 2009)
and €20.8 million (€28.8 million as of December 31, 2009), of which
respectively €265.2 million and €20.8 million expire after 2015 or
can be carried forward without any time limit. Deferred taxes are
calculated by using effective rates over the period in question in
accordance with the tax laws in force in each concerned country.
Temporary differences controlled by the Group
No deferred tax liability is recognized with respect to temporary
taxable differences between the accounting and tax values of
investments where Imerys is in a position to control the date of
reversal of the temporary difference and it is probable that the
temporary difference shall not reverse in a foreseeable future. The
Group assesses that the related deferred tax liability unrecognized
as of December 31, 2010 amounts to €11.6 million (€6.3 million as
of December 31, 2009).
1852010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
Scope of consolidation as of December 31, 2010
In the following table, the percentages of interest are identical to the percentages of control, unless otherwise indicated.
Countries
Entities Business groups% of
interest
Countries
Entities Business groups% of
interest
France
AGS CRAF 99.50 Imerys Holding Parent
Ardoisières d’Angers M&M 100.00 Imerys Services Holding 100.00
Calderys France M&M 100.00 Imerys Tableware France CRAF 100.00
Charges Minérales du Périgord PP 100.00 Imerys TC M&M 100.00
Damrec CRAF 100.00 Mircal Holding 100.00
Imerys Ceramics France CRAF/PFM 99.99 Mircal Europe Holding 100.00
Imerys Kiln Furniture France M&M 100.00 World Minerals France PFM 100.00
Imerys Minéraux France PFM 100.00
Europe
Germany
Calderys Deutschland M&M 100.00 Treibacher CRAF 100.00
Imerys Tableware Deutschland CRAF 100.00 Treibacher Zschornewitz CRAF 100.00
Austria
Calderys Austria M&M 100.00 Treibacher CRAF 100.00
Belgium
Calderys Belgium M&M 100.00 Timcal Belgium CRAF 100.00
Imerys Minéraux Belgique PP/PFM 100.00
Spain
Celite Hispanica PFM 100.00 Imerys Kiln Furniture Espana M&M 97.11
Europerlita Espanola PFM 100.00 Imerys Tiles Minerals Espana CRAF 100.00
Great Britain
Calderys UK M&M 100.00 Imerys UK Holding 100.00
Imerys Minerals CRAF/PFM/PP 100.00 UCM Magnesia CRAF 100.00
Hungary
Calderys Magyarorszag M&M 100.00 Imerys Kiln Furniture Hungary M&M 100.00
❚ OTHER INFORMATION
Note 27 Main consolidated entities
Changes in the scope of consolidation
Performance & Filtration Minerals (PFM). The Performance &
Filtration Minerals did not perform any significant acquisition since
the 2nd half of 2008 where the business group had strengthened its
range of minerals with the acquisition of Kings Mountain Minerals
in the United States and Suzorite Mining in Canada, companies
specialized in the extraction and transformation of mica.
Pigments for Paper (PP). The acquisition of the Brazilian group
PPSA over the 2nd half of 2010 represents the first significant change
in the scope of consolidation of the Pigments for Paper since the
business group built a production unit of ground calcium carbonate
(GCC) in Niigata (Japan) within a partnership (60.0% Imerys) with the
paper producer Hokuetsu over the 2nd half of 2007.
Materials & Monolithics (M&M). The scope of consolidation of
the Materials & Monolithics business group has not significantly
changed since the disposal over the 1st half of 2009 of Planchers
Fabre, an operation of the Clay Roof Tiles & Bricks France activity
specialized in concrete beams. The last significant inflow in the scope
of consolidation of the business group dates back to the 1st half of
2008, where the business group had acquired Svenska Silikaverken
A.B, a Swedish producer of monolithic refractory products.
Minerals for Ceramics, Refractories, Abrasives & Foundry
(CRAF). The Minerals for Ceramics, Refractories, Abrasives &
Foundry did not perform any significant integration since that of
Astron China, a major producer of zircon-based products, acquired
over the 1st half of 2008.
186 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
Countries
Entities Business groups% of
interest
Countries
Entities Business groups% of
interest
Italy
Calderys Italia M&M 100.00 Spica CRAF 85.87
Gran Bianco Carrara PFM 100.00 Treibacher CRAF 100.00
Imerys Minerali PP 100.00 World Minerals Italia PFM 100.00
Imerys Tiles Minerals Italia CRAF 100.00
Luxembourg
World Minerals International Sales PFM 100.00
Russia
Calderys M&M 100.00
Slovenia
Treibacher CRAF 100.00
Sweden
Calderys Nordic M&M 100.00 Imerys Mineral PP 100.00
Switzerland
Timcal CRAF 100.00
Ukraine
Calderys Ukraine M&M 74.90 Vatutinsky Kombinat Vognetryviv CRAF 85.83
United States
Advanced Minerals Corporation PFM 100.00 Imerys Marble PFM 100.00
Americarb PP 100.00 Imerys Paper Carbonates PP 100.00
Celite Corporation PFM 100.00 Imerys USA Holding 100.00
C-E Minerals CRAF 100.00 Kentucky Tennessee Clay Company CRAF 100.00
Ecca Calcium Products PFM/PP 100.00 Kings Mountain Minerals PFM 100.00
Harborlite Corporation PFM 100.00 KT Feldspar Corporation CRAF 100.00
Imerys Carbonates PFM/PP 100.00 UCM Magnesia CRAF 100.00
Imerys Clays PFM/PP 100.00 Treibacher North America CRAF 100.00
Imerys Kaolin PFM/PP 100.00 UCM Zirconia CRAF 100.00
Rest of the World
South Africa
Calderys South Africa M&M 73.97 (1) Rhino Minerals CRAF 73.97 (1)
Ecca Holdings CRAF 73.97 (1) Samrec CRAF 73.97 (1)
Argentina
Imerys Argentina PFM/PP 100.00
Australia
Imerys Minerals Australia PP 100.00
Brazil
Imerys Do Brasil Comercio PFM/PP 100.00 Treibacher Brasil CRAF 100.00
Imerys Rio Capim Caulim PP 100.00 Para Pigmentos PP 100.00
Canada
Imerys Canada PP 100.00 Timcal Canada CRAF 100.00
Suzorite Mining PFM 100.00
China
Imerys Astron Advanced Materials CRAF 100.00 Yingkou Imerys Astron Chemical CRAF 100.00
Imerys Pigments Wuhu PP 100.00 Zibo Imerys Astron Advanced Materials CRAF 100.00
India
Ace Calderys M&M 99.80 (2)
Japan
Calderys Japan M&M 100.00 Imerys Minerals Japan PP 100.00
1872010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
Countries
Entities Business groups% of
interest
Countries
Entities Business groups% of
interest
Malaysia
Imerys Minerals Malaysia PP 100.00
Mexico
Celite Mexicana PFM 100.00 Liquid Quimica Mexicana PFM 100.00
KT Clay de Mexico CRAF 100.00
New Zealand
Imerys Tableware New Zealand CRAF 100.00
Taiwan
Calderys Taiwan M&M 100.00 Imerys Minerals Taiwan PP 100.00
(1) Percentage of control: 100.00%
(2) Percentage of control: 99.74%
Note 28 Currency rates
(€)
Foreign currencies
2010 2009
Closing Average Closing Average
South Africa ZAR 8.8625 9.7013 10.6660 11.6730
Argentina ARS 5.3125 5.1894 5.4695 5.2108
Australia AUD 1.3136 1.4427 1.6008 1.7728
Brazil BRL 2.2264 2.3323 2.5084 2.7640
Canada CAD 1.3322 1.3655 1.5128 1.5851
China CNY 8.8220 8.9753 9.8350 9.5260
United States USD 1.3362 1.3262 1.4406 1.3945
Great Britain GBP 0.8608 0.8520 0.8881 0.8911
Hungary HUF (100) 2.7795 2.7540 2.7042 2.8040
India INR 59.5835 60.5943 66.7217 67.4620
Japan JPY (100) 1.0865 1.1632 1.3316 1.3035
Malaysia MYR 4.0950 4.2691 4.9326 4.9073
Mexico MXN 16.5475 16.7425 18.9223 18.8045
New Zealand NZD 1.7200 1.8389 1.9803 2.2121
Russia RUB 40.8200 40.2623 43.1540 44.1362
Sweden SEK 8.9655 9.5387 10.2520 10.6199
Switzerland CHF 1.2504 1.3807 1.4836 1.5101
Taiwan TWD 38.9779 41.7606 45.8649 46.0366
Ukraine UAH 10.6580 10.5477 11.5389 11.2490
Note 29 Related parties
External related parties of Imerys
The related parties of Imerys are the Canadian group Power and the
Belgian group Frère-CNP. These groups are the ultimate controlling
parties of Imerys. Through their joint venture Parjointco, they exercise
joint control on the Swiss group Pargesa that controls Imerys through
a direct investment and an indirect investment in the Belgian group
GBL; in this respect, Pargesa is a related party. The GBL group is a
related party as it exercises a direct significant influence on Imerys.
Imerys is not party to any contract with its external related parties.
188 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
Key management personnel of Imerys
The managers qualifying as related parties as of December 31, 2010 are the 16 members of the Board of Directors (13 members as of
December 31, 2009) and the 10 members of the Executive Committee (9 members as of December 31, 2009), of which the Chief Executive
Officer who is also member of the Board of Directors.
Remuneration and assimilated benefits granted to these related parties are disclosed in the table hereafter:
(€ millions) Notes
2010 2009
Expense Liability Expense Liability
Short-term benefits 1 (5.6) 2.3 (5.0) 2.0
Long-term benefits - - - -
Directors’ attendance fees 2 (0.6) 0.3 (0.6) 0.3
Defined benefit plans 3 (3.3) 1.9 (3.4) 0.6
Contributions to defined contribution plans (0.4) - (0.4) -
Termination benefits - - - -
Share-based payments 4 (4.3) - (3.3) -
Total (14.2) 4.5 (12.7) 2.9
Note 1. Short-term benefits. These amounts include the fixed part
of the remuneration paid for the period as well as the variable part
due for the same period, but paid over the subsequent period.
Note 2. Directors’ attendance fees. These amounts correspond
to the fees paid to the members of the Board of Directors.
Note 3. Post-employment benefits. These amounts correspond
to the post-employment defined benefit plans allowed to the main
executives of the Group’s French entities who meet the required
conditions of eligibility. These amounts are recognized for the
beneficiaries qualifying as related parties, among which the Chief
Executive Officer as well as some of the above mentioned executives
(8 in 2010, 7 in 2009). The maximum amount of the life annuity that
can be paid to the beneficiaries of these plans as from the liquidation
of their retirement rights is calculated in order to guarantee a life
annuity:
■ of a total gross annual amount (after recognition of pensions from
obligatory and complementary retirement plans) of 60.0% of their
salary of reference, this salary of reference being capped to 22
times the annual ceiling of the French Social Security;
■ subject to a payment ceiling of 25.0% of the above mentioned
salary of reference of the last 12 calendar months preceding the
withdrawal from the Group’s headcount.
Note 4. Share-based payments. This amount corresponds to
expenses recognized with respect to the Imerys share options and
the free shares attributed to the related parties.
Post employment benefits for Imerys employees
The post-employment benefit plans for the benefit of Imerys
employees are related parties. The amount of the contributions
to external funds recognized as an expense in 2010 amounts to
€32.1 million (€53.7 million in 2009), of which mainly €13.9 million to
Imerys UK Pension Fund Trustees Ltd., Great Britain (€16.5 million in
2009) and €9.8 million to Sun Trust Bank, United States (€26.2 million
in 2009).
FCPE Imerys Actions
The FCPE Imerys Actions is managed by BNP Paribas Asset
Management SAS. Its management is controlled by a Supervisory
Board of 14 members, equally made up of shareholders’ and Imerys
representatives. As Imerys exercises together with the shareholders a
joint control over the FCPE Imerys Actions, the FCPE Imerys Actions
is a related party. The amounts recognized in 2010 (and 2009) for
the FCPE Imerys Actions are insignificant.
Note 30 Commitments
In the course of its activities, Imerys is liable towards third parties
for obligations, often subordinated to conditions or subsequent
events, that do not (or partially) meet the recognition criteria of
liabilities, but may have an impact on the future financial position.
The unrecognized portion of the obligation is designated hereafter
by the term commitment.
1892010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Consolidated financial statements
Identified in accordance with applicable accounting standards, the significant commitments, given and received, are presented hereafter:
Commitments given
(€ millions) Notes 2010 2009
Operating lease 1 134.3 167.7
Site restoration 2 15.5 7.5
Commitments related to operating activities 3 328.7 296.6
Commitments related to treasury 4 42.9 53.4
Other commitments 5 19.5 19.1
Total 540.9 544.3
Note 1. Operating lease. The operating lease commitments
correspond to commitments to pay future rent as part of lease
contracts of real estate, equipment, rail cars, trucks and vehicles,
in which Imerys is the lessee. These commitments amount to
€134.3 million, of which €18.2 million for 2011, €40.4 million for the
period 2012 to 2015 and €75.7 million beyond.
Note 2. Site restoration. These amounts correspond to sureties and
guarantees obtained from financial institutions in accordance with
legal requirements, decreased by recognized provisions (Note 24.2).
Note 3. Commitments related to operating activities. These
commitments correspond to firm purchase commitments taken by
Imerys as part of purchase contracts of goods, services, energy and
freight. These commitments comprise in particular two commitments
of purchase of services that aim at guaranteeing the shipping
logistics of the Group until 2017 (chartering contract) and 2022
(storage and handling contract) for a total amount of €124.9 million
as of December 31, 2010 (€139.1 million as of December 31, 2009).
Note 4. Commitments related to treasury. These commitments
correspond to letters of credit as well as to sureties, guarantees,
mortgages and pledges obtained by Imerys from financial institutions
in order to guarantee operating treasury requirements in favor of
customers.
Note 5. Other commitments. This position encompasses the whole
of the commitments given not mentioned above, among which the
seller warranties and the price adjustment clauses given by the Group
upon disposals of businesses.
Commitments received
(€ millions) Notes 2010 2009
Operating lease 1 1.6 10.7
Commitments related to operating activities 2 28.5 16.3
Commitments related to treasury 3 1.6 2.1
Other commitments 4 13.2 3.2
Total 44.9 32.3
Note 1. Operating lease. The operating lease commitments
correspond to commitments to pay future rent as part of lease
contracts in which Imerys is the lessor.
Note 2. Commitments related to operating activities. These
commitments correspond to firm purchase commitments taken by
customers in favor of Imerys as part of sales contracts of goods
and services.
Note 3. Commitments related to treasury. These commitments
correspond to letters of credit as well as to sureties, guarantees,
mortgages and pledges obtained by certain suppliers from their
financial institutions, in order to guarantee their operating treasury
requirements in favor of Imerys.
Note 4. Other commitments. This position encompasses the whole
of the commitments received not mentioned above, among which
the seller warranties and the price adjustment clauses in favor of the
Group upon acquisitions of businesses.
190 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Consolidated financial statements
Note 31 Country risks
Due to their mining activity and the variety of their final markets, the
entities of Imerys are located in numerous countries. The Group may
thus be exposed to certain risks peculiar to these countries which
may have in the future a certain impact on its financial statements.
The fact that most of the supply sources and final markets of Imerys
are located in developed countries however limits the exposure of
the Group to these country risks.
In order to identify high-risk countries, Imerys uses the grading
system @rating of the Coface, the main French insurance company
specialized in export credit insurances, which measures if an
economic and financial commitment in an entity is influenced by
the economic, financial and political prospects of the concerned
countries. The grading system of the Coface consists of 7 categories
from A1 to D, with an increasing order of importance of the assessed
risks. The categories C and D corresponding to the highest risks
include Argentina, Venezuela, Ukraine and Zimbabwe where the
Group is present.
The revenue performed in these countries represents in 2010 1.12%
of the Group revenue (2.24% in 2009) and 1.26% of the current
operating income (1.22% in 2009). The total of the statement of
financial position located in these countries represents 0.20% of
the statement of financial position (0.41% as of December 31, 2009)
and - 0.64% of consolidated equity, Group share (- 0.58% as of
December 31, 2009).
Note 32 Events after the end of the period
The annual consolidated financial statements as of December 31, 2010 were closed by the Board of Directors at its meeting on February 15, 2011.
No significant event after the end of the period is to be reported.
1912010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Statutory financial statements
Unless otherwise indicated, all values in the tables are in thousands of Euros.
5.2 I STATUTORY FINANCIAL STATEMENTS
FINANCIAL COMMENTARY
The financial statements of Imerys (or the “Company”) only provide
a very partial view of the Group’s economic and financial position,
which is reflected only in the consolidated financial statements.
In 2010, the net income of the Company amounts to €83.6 million
whereas the 2009 net income reached €71.9 million.
The main factors for 2010 were:
The acquisition by the Imerys group of the Brazilian company
Pará Pigmentos SA (PPSA) on July 26, 2010. Imerys took over two
loans from CMM Overseas for a total amount of USD 50.6 million, and
financed the acquisition of PPSA shares by Mircal Brésil.
The evolution of financial resources. The financial debts of
Imerys SA increase by €61.8 million in 2010.
Investments increase by €165.8 million due to the subscription to
the capital increase of Mircal Chili for an amount of €15.5 million
and to the capitalization of two loans granted to Imerys USA for a
total amount of €150.3 million. It is mainly this capitalization which
explains the decrease of loans related to direct investments and other
subsidiaries for a net amount of €181.9 million in 2010.
The structure of financing means has not been modified compared
to 2009.
The increase in the operating loss. Sales slightly decrease by
€0.3 million whereas other revenue decreases by €0.8 million due to
the decrease in retirement provisions of €5.6 million in 2010 against
€7.0 million in 2009.
These decreases in provisions relate to payments of an amount of
€5.0 million made in 2010 and of €7.0 million made in 2009 for a
retirement plan in order to hedge the commitments related to these
plans by financial assets.
The operating expenses of the Company increase by €9.6 million
in 2010. This increase can mainly be explained by the constitution
of a provision for risks for an amount of €4.1 million corresponding
to the future transfer of treasury shares of the Company as part of
free shares plans.
Purchases and external services slightly increase by + 1.5% in order
to reach - €35.9 million. The increases in provisions rise by €2.9 million
due to the constitution of the provision for risks for an amount of
€4.1 million mentioned above, partly offset by a decrease in the
amortization / depreciation allowance for an amount of €0.4 million
and a decrease of €0.8 million in the retirement provisions accrual.
In total, the operating loss increases by €10.7 million.
The increase in the financial income. The financial income
increases by €27.7 million compared to the 2009 period. Revenue
from subsidiaries and affiliates slightly increases by €0.8 million. The
exchange rate gain, net of change in provisions for exchange rate
losses, increases by €25.3 million.
Thus, the current income increases by €17.0 million.
192 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Statutory financial statements
5.2.1 FINANCIAL STATEMENTS
❚ INCOME STATEMENT
(€ thousands) Notes 2010 2009
Operating revenue 28,708 29,851
Rendering of services 18,874 19,197
Other revenue and decreases in provisions 5,723 8,051
Transfer of expenses 9 4,111 2,603
Operating expenses (71,951) (62,394)
Purchases and external services (35,955) (35,431)
Taxes and duties (624) (683)
Staff expenses (25,799) (19,175)
Amortization, depreciation, write-downs and provisions (8,573) (5,638)
Other expenses (1,000) (1,467)
Operating income (43,243) (32,543)
Financial income 10 101,269 73,618
Revenue from subsidiaries and affiliates 103,384 102,578
Net financial expenses (54,590) (54,019)
Increases and decreases in write-downs and provisions 41,635 (44,126)
Exchange rate gains and losses 10,840 69,185
Current income 58,026 41,075
Exceptional income (loss) 11 2,825 105
Exceptional revenue 5,880 15,251
Exceptional expenses (3,055) (15,146)
Income taxes 12 22,794 30,755
Net income 83,645 71,935
1932010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Statutory financial statements
❚ BALANCE SHEET
(€ thousands) Notes 2010 2009
Net intangible assets 1,337 1,507
Intangible assets 13 8,708 7,885
Accumulated amortization 13 (7,371) (6,378)
Net property, plant and equipment 2,005 2,020
Property, plant and equipment 13 6,284 5,776
Accumulated depreciation 13 (4,279) (3,756)
Net investments 3,307,210 3,141,410
Investments 14 3,310,213 3,144,413
Write-downs 14-20 (3,003) (3,003)
Loans related to direct investments and other subsidiaries - net value 516,812 698,739
Loans related to direct investments and other subsidiaries 15-17 516,812 698,739
Write-downs 20 - -
Other financial investments 16-17 2,263 2,139
Non-current assets 3,829,627 3,845,815
Other receivables 17 13,261 11,000
Derivative financial assets 179 258
Marketable securities 18 164,620 100,028
Cash and cash equivalents 2,596 2,703
Current assets 180,656 113,989
Regularization accounts 17 35,736 75,244
Assets 4,046,019 4,035,048
Share capital 150,948 150,779
Additional paid-in capital 338,358 339,414
Reserves 959,031 956,677
Retained earnings 369,030 375,039
Net income of the period 83,645 71,935
Shareholders’ equity 19 1,901,012 1,893,844
Provisions for risks and charges 20 43,878 84,845
Financial debts 21 2,047,756 1,986,001
Other debts 21 25,429 29,151
Derivative financial liabilities 21 138 365
Debts 2,073,323 2,015,517
Regularization accounts 21 27,806 40,842
Shareholders’ equity and liabilities 4,046,019 4,035,048
194 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Statutory financial statements
❚ CASH FLOW STATEMENT
(€ thousands) 2010 2009
Cash flow from operating activities
Net income 83,645 71,936
Expenses and revenue with no impact on cash flow
Amortization and depreciation 2,234 2,700
Write-downs and provisions (43,783) 38,899
Income on disposal of assets 5 1
Current operating cash flow before working capital changes 42,101 113,536
Change in the working capital requirement (6,281) 35,523
Cash flow from operating activities 35,820 149,059
Cash flow from investing activities
Acquisitions of assets
Intangible assets and property, plant and equipment (1,340) (424)
Financial (investments and related assets) (15,654) 857
Disposals of assets
Intangible assets and property, plant and equipment - -
Financial (investments and related assets) - (1)
Cash flow from investing activities (16,994) 432
Cash flow from financing activities
Change in financial debts 90,480 (387,014)
Change in loans and other financial assets 31,652 114,595
Cash flow from financing activities 122,132 (272,419)
Capital operations
Capital increase 6,090 248,816
Capital decrease by cancellation of treasury shares (7,062) -
Dividends paid (75,505) (62,788)
Cash flow from transactions on equity (76,477) 186,028
Change in cash and cash equivalents 64,485 63,100
(€ thousands) 2010 2009
Cash and cash equivalents at the beginning of the period 102,731 39,631
Change in cash and cash equivalents 64,485 63,100
Cash and cash equivalents at the end of the period 167,216 102,731
❚ DETAIL OF MOVEMENTS ON TREASURY SHARES
(€ thousands) 2010 2009
Gross amount of treasury shares booked as investments as of January 1 6 0
Purchases of treasury shares 12,994 133
Sales of treasury shares - -
Transfer of treasury shares (free shares) - (127)
Capital decrease by cancellation of treasury shares (7,062) -
Gross amount of treasury shares booked as investments as of December 31 5,938 6
1952010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Statutory financial statements
TABLE OF CONTENTS
❚ ACCOUNTING PRINCIPLES AND POLICIES 196
Note 1 Intangible assets and property, plant and equipment 196
Note 2 Long-term investments 196
Note 3 Receivables and debts in foreign currencies 196
Note 4 Foreign currency exposure 197
Note 5 Marketable securities 197
Note 6 Provisions 197
Note 7 Risks pertaining to financial markets 197
Note 8 Tax consolidation 198
Note 9 Transfer of expenses 198
❚ NOTES TO THE INCOME STATEMENT 199
Note 10 Financial income 199
Note 11 Exceptional income (loss) 199
Note 12 Income taxes 200
❚ NOTES TO THE BALANCE SHEET 201
Note 13 Changes in property, plant and equipment and intangible assets 201
Note 14 Changes in the value of investments 201
Note 15 Loans related to investments 201
Note 16 Other financial investments 201
Note 17 Other receivables 202
Note 18 Marketable securities 202
Note 19 Breakdown of changes in shareholders’ equity 203
Note 20 Write-downs and provisions 204
Note 21 Debts and regularization accounts as of December 31, 2010 206
Note 22 Accrued receivables and payables 207
❚ OTHER INFORMATION 208
Note 23 Off balance sheet commitments 208
Note 24 Other commitments in relation to subsidiaries 208
Note 25 Commitments on the foreign exchange rate risk 208
Note 26 Commitments on the interest rate risk 209
Note 27 Commitments on the energy price risk 209
Note 28 Elements recognized under more than one balance sheet item (net value) 209
Note 29 Main shareholders 209
Note 30 Headcount as of December 31, 2010 210
Note 31 Individual training rights as of December 31, 2010 210
Note 32 Compensation of directors and executive managers 210
Note 33 Post closing events 210
Note 34 Allocation of earnings (pursuant to the provisions of article L. 232-7 of the French Code of Commerce) 210
Note 35 Table of subsidiaries and equity interests as of December 31, 2010 211
5.2.2 NOTES TO THE STATUTORY FINANCIAL STATEMENTS
196 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Statutory financial statements
❚ ACCOUNTING PRINCIPLES AND POLICIES
The general accounting rules have been applied under the principle
of prudence and in accordance with the basic assumptions: going
concern, permanence of accounting policies from one period to the
other, independence of periods, in accordance with the general rules
of preparation and presentation of the annual financial statements.
The methodology generally used is the historical cost method for the
items recognized in the books.
The statutory financial statements provide comparative information
with respect to period N-1. Comparative information with respect to
period N-2 is incorporated by reference to the financial statements
included in the registration document of period N-2 (see chapter 8,
section 8.4 of the Registration Document).
Note 1 Intangible assets and property, plant and equipment
Intangible assets
Intangible assets are valued at acquisition cost. Software is amortized
over 3 years using the straight-line method.
Property, plant and equipment
Property, plant and equipment are assessed at acquisition cost or
at their contribution value.
The depreciation methods used are representative of economic
depreciation; therefore, no excess tax depreciation was recognized
under liabilities in the balance sheet.
Depreciation methods and periods are as follows:
■ machinery and equipment: straight-line method, over 10 years;
■ equipment and office furniture: straight-line method, over 5 and
10 years;
■ office equipment: straight-line method, over 5 years;
■ IT equipment: straight-line method, over 3 years.
Note 2 Long-term investments
The long-term investments are valued at acquisition cost, excluding
ancillary expenses.
Investments and other long-term investments are estimated at
their value in use. The value in use is evaluated according to the
value of the Company, based notably on its previous results and
its profitability prospects, to the portion of converted equity owned
for these investments and to the net asset value. When this value is
higher than the carrying amount recognized in the balance sheet,
the latter is not modified. On the contrary, a write-down of the
investment is recognized.
Unrealized losses generated from the fluctuations of foreign
currencies in which the long-term investments are denominated are
not aimed to realize. Therefore, unrealized exchange losses do not
constitute in themselves sufficient criteria to justify systematically a
provision for depreciation.
Note 3 Receivables and debts in foreign currencies
Receivables and debts in foreign currencies are converted at closing rate.
1972010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Statutory financial statements
Note 4 Foreign currency exposure
Where, for transactions presenting sufficiently close maturities, the unrealized gains and losses may be considered as contributory to a global
foreign exchange position, the amount of the increase in the provision for exchange rate losses is limited to the excess of unrealized losses
over unrealized gains.
Note 6 Provisions
Provisions for risks
Provisions for risks cover identified risks and are determined in
accordance with the following method:
■ provisions for operational risks include mainly litigation in progress
related to the current activities;
■ provisions for restructuring relate to reorganization plans officially
decided and initiated before the end of the period;
■ provisions pertaining to changes in the value of certain equity
interests are determined in accordance with the last financial
information available and the evolution prospects.
Provisions for charges
They mainly include:
■ provisions for supplementary pension plans and pensions for
former employees;
■ retirement indemnities expense calculated in accordance with
the Projected Unit Credit Method.
Imerys applies the recommendation no. CNC 2003-R01 applicable
to the valuation and accounting for pension commitments and similar
advantages.
Note 5 Marketable securities
Their value in use is assessed at their average market price of the last month of the period for listed stocks, at the last known redemption
price for the SICAVs (money market funds) and at their net asset value for the FCPs (equity funds). Unrealized losses of value are subject to a
write-down, unrealized gains are not recognized.
Note 7 Risks pertaining to financial markets
As a holding company and head of the Group, the Company
implements the management of financial market risks identified within
the Group (foreign exchange rate risk, interest rate risk, energy price
risk).
The main instruments and risks are described hereafter:
■ the derivative instruments used to hedge the foreign exchange
rate risk are mainly forward buying and selling foreign currency
contracts as well as change options. A global foreign exchange
position is established when transactions in foreign currencies
(hedged items and hedging instruments) result in the symmetrical
recognition of an asset and a liabil ity presenting close
characteristics. For those options complying with the Group’s
risk management policy, but not qualified as hedging options, a
provision for risks and charges is recognized where the market
value is inferior to the original contractual value. Unrealized gains
are not recognized;
■ the Company implements swaps and options in order to hedge
the interest rate risk. The expenses and revenue related to the
hedging instruments are recognized in profit or loss symmetrically
to the expenses and revenue of hedged items;
■ in order to hedge the energy price risk which affects its
subsidiaries, the Company uses option contracts as well as
forward buying and selling contracts. The expenses and revenue
related to hedging instruments of the Company’s risks are
recognized in profit or loss symmetrically to the expenses and
revenue of hedged items. For those options and contracts related
to the hedging of risks affecting the Company’s subsidiaries which
comply with the Group’s risk management policy, but which are
not qualified as hedging options in the financial statements of
the Company, a provision for risks and charges is recognized
where the market value is inferior to the original contractual value.
Unrealized gains are not recognized.
198 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Statutory financial statements
Note 8 Tax consolidation
Since 1993, Imerys and some of its French subsidiaries have been assessed under Article 223 A of the French Tax Code in respect of group
taxation. The tax consolidation perimeter, identical to the 2009 perimeter, includes as of December 31, 2010 the 28 entities mentioned below:
❚ AGS ❚ KPCL KVS
❚ Ardoisières d’Angers ❚ Mircal
❚ Calderys France ❚ Mircal Brésil
❚ Charges Minérales du Périgord ❚ Mircal Chili (ex Parnasse 16)
❚ Damrec ❚ Mircal China
❚ IGM For Fibre Glass (ex Parnasse 29) ❚ Mircal Europe
❚ Imerys ❚ Parimétal
❚ Imerys Ceramics France ❚ Parnasse 22
❚ Imerys Foundry Minerals Europe ❚ Parnasse 25
❚ Imerys Kiln Furniture France ❚ Parnasse 27
❚ Imerys Minéraux France ❚ Parnasse 28
❚ Imerys Services ❚ PLR Réfractaires SAS U
❚ Imerys Tableware France ❚ Rieux Réfractaires
❚ Imerys TC ❚ World Minerals France
Within the fiscal group headed by Imerys, the relationships are governed by a convention whose principles are summarized below:
■ the tax consolidated entities benefit from a situation identical to the one that they would have had in the absence of tax consolidation;
■ all additional expenses are recognized at Imerys which benefits in counterpart from any potential savings generated by this system.
The transfer of expenses positions mainly correspond to:
■ the transfer of expenses to balance sheet accounts (loan issuance costs, capital increase costs);
■ the transfer from one category of expenses to another (operating expenses transferred to exceptional or financial expenses or vice versa).
Note 9 Transfer of expenses
1992010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Statutory financial statements
❚ NOTES TO THE INCOME STATEMENT
Note 10 Financial income
(€ thousands) 2010 2009
Financial revenue 307,334 377,267
Revenue from subsidiaries and affiliates (1) 103,384 102,578
Other investment income - net (1) 29,513 65,283
Decreases in provisions and transfer of expenses 72,665 32,076
Exchange rate gains 101,772 177,330
Financial expenses 206,065 303,649
Financial interests and expenses on financial instruments (2) 84,103 122,593
Increases in financial amortization and provisions 31,030 72,912
Exchange rate losses 90,932 108,144
Financial income 101,269 73,618
(1) of which revenue related to controlled entities 112,479 144,568
(2) of which expenses related to controlled entities 9,948 7,783
In 2010, the Company received €103.4 million of dividends.
As a holding company, Imerys manages its balance sheet foreign
exchange rate risk, notably linked to the foreign net assets held
directly or indirectly by the Company and also resulting from the loans
and advances granted to the subsidiaries and entities controlled by
the Company in accordance with the intra-group treasury contracts.
Therefore, the proportion of the financial indebtedness drawn in
foreign currencies is adjusted. In relation to this adjustment, Imerys
recognized in 2010 a net foreign exchange gain of €10.8 million
(a gain of €69.2 million was realized in 2009) mainly due to the
hedging of foreign investments by Imerys.
For the record, at the same time, assets held by subsidiaries are not
subject to revaluation of investments in the balance sheet.
Note 11 Exceptional income (loss)
(€ thousands) 2010 2009
Gains and losses on disposals of assets (5) (2)
Other exceptional revenue 61 1
Decreases in provisions and transfer of expenses 3,279 4,138
Increases in provisions (508) (3,675)
Other exceptional expenses (2) (357)
Exceptional income (loss) 2,825 105
The gains and losses on disposals of assets in 2010 relate to an
intra-group loan transfer (€2.5 million) at net book value and the
disposal of IGM for Fibre Glass shares to Imerys Ceramics France.
The decreases in provisions as of December 31, 2010 relate to
a provision for Group restructuring (€1.5 million), a provision for
headquarter restructuring (€0.2 million) and a provision for exceptional
expenses (€1.5 million).
A provision for Group restructuring was constituted in 2010 for an
amount of €0.5 million.
200 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Statutory financial statements
Note 12 Income taxes
(€ thousands) 2010 2009
Taxes on long-term capital gains - -
Income taxes 22,794 30,755
Total 22,794 30,755
Breakdown of the tax expense of the Company
(€ thousands)
Result before taxes Taxes
Result after taxes
Current income 58,026 - 58,026
Exceptional income (loss) 2,825 - 2,825
Impact of the tax consolidation - 22,794 22,794
Total 60,851 22,794 83,645
In accordance with the terms of the tax consolidation conventions
signed by each company of the Group, the tax expense or credit
recognized in the accounts of Imerys is composed of:
■ the tax expense of the Company, calculated as if it was not fiscally
consolidated;
■ the net amount of additional expenses and credits resulting from
the tax consolidation.
In this context, Imerys recognized a credit of €22.8 million for the
2010 period.
As regards Imerys, the Company recognizes in 2010 a loss of
€56.0 million that has been used by the consolidated group in
accordance with the rules of tax consolidation. At the end of
2010, the balance of carried forward short-term losses amounts to
€530.9 million.
Change in deferred taxes (deferred tax basis)
Description
(€ thousands)
As of December 31, 2010 As of December 31, 2009
Assets Liabilities Assets Liabilities
Temporary differences 29,059 60,738 70,690 120,772
Deductible next year - 30,163 - 73,496
Deductible later - 2,769 - 6,434
Deducted expenses or taxed revenue not yet recognized 29,059 27,806 70,690 40,842
Potentially taxable items - 273,471 - 273,471
Special reserve for long-term capital gains - 273,471 - 273,471
Other - - - -
2012010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Statutory financial statements
❚ NOTES TO THE BALANCE SHEET
Note 13 Changes in property, plant and equipment and intangible assets
(€ thousands)
Gross amount 12/31/2009 Acquisitions Disposals
Gross amount 12/31/2010
Intangible assets 7,885 823 - 8,708
Property, plant and equipment 5,776 508 - 6,284
Total gross intangible assets and property,
plant and equipment 13,661 1,331 0 14,992
(€ thousands)
Amortization and depreciation as of
12/31/2009 Increases Decreases
Amortization and depreciation as of
12/31/2010
Amortization of intangible assets 6,378 993 - 7,371
Depreciation of property, plant and equipment 3,756 523 - 4,279
Total amortization and depreciation of intangible assets
and property, plant and equipment 10,134 1,516 0 11,650
Note 14 Changes in the value of investments
The gross amount of investments increases by €165.8 million due to the subscription to the capital increase of Mircal Chili for an amount of
€15.5 million and to the capitalization of two loans granted to Imerys USA for a total amount of €150.3 million.
Write-down allowances remain unchanged since 2005. They amount to €3.0 million and relate to investments of a subsidiary whose activity
has ceased.
Note 15 Loans related to investments
The amount of loans related to investments decreases by €181.9 million. Two loans granted to Imerys USA of respectively €127.9 million and
€22.4 million were capitalized in 2010. These receivables related to investments correspond to loan contracts and intra-group credit agreements
aimed at optimizing the cash management.
Note 16 Other financial investments
The other financial investments mainly include 19,797 Quadrem shares held by Imerys since October 11, 2000 for a gross amount of €2.1 million.
The equity interest of Imerys represents 1.196% of the Quadrem share capital.
202 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Statutory financial statements
Note 17 Other receivables
(€ thousands) Gross amountMaturity less
than one yearMaturity from one
to five yearsMaturity
beyond five years
Loans and receivables related to investments 516,812 336,334 80,139 100,339
Loans and receivables related to direct investments 36,252 36,252 - -
Loans and receivables related to other Group subsidiaries 480,560 300,082 80,139 100,339
Other financial investments 2,263 1 - 2,262
Other receivables 13,261 12,129 948 184
Operating receivables 11,823 11,823 - -
Bond issuance premium 1,438 306 948 184
Regularization account 35,736 33,373 1,863 500
Prepaid expenses 4,507 3,905 602 -
Bond issuance cost 2,170 409 1,261 500
Unrealized foreign exchange rate losses 29,059 29,059 - -
Total 568,072 381,837 82,950 103,285
Note 18 Marketable securities
Net values
(€ thousands) 2010 2009
SICAVs and mutual funds 158,682 100,028
Treasury shares 5,938 -
Total 164,620 100,028
As of December 31, 2010, the gross amount of marketable securities amounts to €164.6 million. No impairment loss has been recognized in
2009 and 2010.
Measurement of marketable securities as of December 31, 2010
Nature Quantity Average cost price per unit (€) Closing price December 2010 (€)
SICAV BNP 1 56,131.58 56,133.99
SICAV BNP 565 56,133.99 56,133.99
SICAV Calyon 139 228,190.59 228,190.59
SICAV Natexis 567 55,962.75 55,962.75
SICAV SG 1 23,223.94 23,224.71
SICAV SG 1,365 23,224.71 23,224.71
SICAV HSBC 10,304 3,079.90 3,079.90
Treasury shares 136,373 43.54 49.89
2032010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Statutory financial statements
Note 19 Breakdown of changes in shareholders’ equity
(€ thousands) Capital Premiums
Reserves (1)
Retained earnings
Income of the period Totallegal regulated other
Shareholders’ equity as of 01/01/09
before allocation of net income 125,573 115,803 12,725 273,471 670,482 350,764 87,063 1,635,881
Allocation of 2008 income - - - - - 24,277 (87,063) (62,786)
Movements of the 2009 period
Capital increase by creation
of 12,557,518 shares 25,115 222,376 - - - - - 247,491
Subscription of 45,388 shares
by exercise of options 91 1,234 - - - - - 1,325
Net income as of 12/31/09 - - - - - - 71,935 71,935
Shareholders’ equity as of 01/01/10
before allocation of net income 150,779 339,413 12,725 273,471 670,482 375,039 71,935 1,893,844
Allocation of 2009 income - - 2,353 - - (5,923) (71,935) (75,505)
Movements of the 2010 period
Cancellation of 171,627 shares of €2.00 (343) (6,719) - - - - - (7,062)
Capital increase by creation
of 42,984 shares 86 - - - - (86) - 0
Subscription of 213,302 shares
by exercise of options 426 5,664 - - - - - 6,090
Net income as of 12/31/10 - - - - - - 83,645 83,645
Shareholders’ equity as of 01/01/11
before allocation of net income 150,948 338,358 15,078 273,471 670,482 369,030 83,645 1,901,012
Proposal for allocation of income (2) - - - - - - (83,645) (83,645)
Shareholders’ equity as of 01/01/11
with proposal for allocation of income 150,948 338,358 15,078 273,471 670,482 369,030 0 1,817,367
(1) Shareholders’ equity of Imerys does not include revaluation differences.
(2) Proposed to the Shareholders’ General Meeting on April 28, 2011.
Number of shares
2010 2009
Number of shares outstanding at the opening 75,389,496 62,786,590
Capital increases 256,286 12,602,906
Capital decreases (171,627) -
Number of shares outstanding at the closing 75,474,155 75,389,496
For 2010, the capital movements are the following:
■ on April 29, 2010, the Board of Directors decided to create 42,984
new shares and thus to increase the Company’s share capital of
a nominal amount of €85,968 by incorporation of reserves, with
a view to serving an equivalent number of free shares definitely
acquired on that date;
■ on December 16, 2010, the Board of Directors, as part of the
share buy-back programs authorized by the Shareholders’
General Meetings of April 29, 2009 and April 29, 2010, cancelled
171,627 treasury shares directly acquired on the market by the
Company and totally allocated to the cancellation objective. This
cancellation of treasury shares lead to a capital decrease of the
Company of a nominal amount of €343,254;
■ on January 10, 2011, the Chief Executive Officer, pursuant to the
delegation of powers given to him by the Board of Directors on
December 16, 2010, noted that, on December 31, 2010, the share
capital had been increased by a nominal amount of €426,604 as
a result of the exercise during the 2010 period of 213,302 share
options giving the right to the same number of Imerys shares.
Detailed information concerning share capital is available in chapter 6,
paragraph 6.2.1 of the Registration Document.
204 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Statutory financial statements
Note 20 Write-downs and provisions
(€ thousands)
Amount at the beginning of the period
Increases Decreases (1) Amount at the end of the periodOperating Financial Exceptional Operating Financial Exceptional
Write-downs
Investments 3,003 - - - - - - 3,003
Trade receivables 23 19 - - (23) - - 19
Loans related to investments - - - - - - - -
Non-consolidated investments - - - - - - - -
Bond issuance premium 1,458 - 306 - - - - 1,764
Marketable securities - - - - - - - -
Prepaid expenses -
future employee benefits - - - - (2,812) - - (2,812)
Total assets 4,484 19 306 - (2,835) - - 1,974
Provisions
Provisions for risks 83,561 4,111 29,520 508 (56) (72,151) (3,279) 42,214
Management risks 4,854 4,111 57 508 (56) - (1,541) 7,933
Provisions for exchange rate losses 70,690 - 29,059 - - (70,690) - 29,059
Staff-related risks 730 - - - - - (230) 500
Environmental risks 5,025 - 404 - - - (1,508) 3,921
Financial instruments 1,461 - - - - (1,461) - 0
Risks on subsidiaries and investments 801 - - - - - - 801
Provisions for charges 1,284 2,926 793 - (2,825) (514) - 1,664
Pensions - - - - - - - -
Future employee benefits 1,284 2,926 793 - (2,825) (514) - 1,664
Other social contributions
and tax expenses - - - - - - - -
Total liabilities 84,845 7,037 30,313 508 (2,881) (72,665) (3,279) 43,878
Grand Total 89,329 7,056 30,619 508 (5,716) (72,665) (3,279) 45,852
(1) Provisions decreased in accordance with used amounts for €5,923 thousand.
As head of the Group, Imerys recognizes management risk and
environmental provisions. They specifically relate to environmental
liability guarantees following the disposal of some investments.
As of December 31, 2010, the provision for financial risks constituted
in 2009, has been totally decreased by an amount of €1.5 million.
This provision relates to hedging transactions on foreign currencies
and on energy prices.
In 2010, a provision for risks has been increased by an amount of
€4.1 million corresponding to the future free grant of 136,373 treasury
shares of the Company. As of December 31, 2010, these treasury
shares are measured at a total amount of €5.9 million.
Some of these instruments, in accordance with the Group’s financial
risk management policy, are not recognized as hedging instruments
at Imerys SA. The financial instruments held as of December 31, 2010
are described in Note 25 and following.
2052010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Statutory financial statements
Future employee benefits
The concerned retirement plans correspond to basic and complementary plans applicable to the metalworking industry.
The provision for future employee benefits is calculated in accordance with the following assumptions:
Retirement Other long-term employee benefits
Discount rates 4.4% 3.3%
Expected rates of return on plan assets 3.7% -
Expected rates of salary increases 3.5% 3.5%
Annual turnover rates:
❚ Non executives until 55 years (included) 20.0% 20.0%
❚ Non executives after 55 years - -
❚ Executives until 55 years (included) 9.0% 9.0%
❚ Executives after 55 years - -
Actuarial differences are recognized according to the corridor method.
Net expense
(€ thousands)
2010 2009
Retirement Other Total Retirement Other Total
Interest cost (781) (12) (793) (864) (11) (875)
Current service cost (1,113) (30) (1,143) (983) (19) (1,002)
Expected return on assets 513 - 513 271 - 271
Past service cost (2,133) - (2,133) (1,990) - (1,990)
Actuarial (gains) and losses 254 (114) 140 (40) (101) (141)
Curtailments and settlements 210 - 210 14 24 38
Recognized net expense (3,050) (156) (3,206) (3,592) (107) (3,699)
Assets’ effective return 816 - 816 (177) - (177)
Change in the discounted value of obligations
(€ thousands)
2010 2009
Retirement Other Total Retirement Other Total
Opening obligations (19,415) (307) (19,722) (11,730) (219) (11,949)
Interest cost (781) (12) (793) (864) (11) (875)
Current service cost (1,113) (30) (1,143) (983) (19) (1,002)
Benefit payments 931 28 959 728 19 747
Plan amendments (1,106) - (1,106) (8,344) - (8,344)
Curtailments and settlements 386 - 386 60 24 84
Actuarial (gains) and losses 547 (114) 433 1,718 (101) 1,617
Closing obligations (1) (20,551) (435) (20,986) (19,415) (307) (19,722)
Funded by plan assets (18,828) - (18,828) (18,431) - (18,431)
Unfunded (1,722) (435) (2,157) (984) (307) (1,291)
(1) Of which retirement obligations to the benefit of the members of the Executive Management and of the Board of Directors: €7,683 thousand in 2010, €6,962 thousand
in 2009.
206 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Statutory financial statements
Change in fair value of plan assets
(€ thousands)
2010 2009
Retirement Other Total Retirement Other Total
Opening assets 13,430 - 13,430 6,986 - 6,986
Expected return on assets 513 - 513 271 - 271
Benefit payments (319) - (319) (728) - (728)
Employer contributions 5,000 - 5,000 7,349 - 7,349
Actuarial gains and (losses) 302 - 302 (448) - (448)
Closing assets 18,926 - 18,926 13,430 - 13,430
Assets / liabilities in the balance sheet
(€ thousands)
2010 2009
Retirement Other Total Retirement Other Total
Funded obligations (18,828) - (18,828) (18,431) - (18,431)
Fair value of assets 18,927 - 18,927 13,430 - 13,430
Funded status 99 - 99 (5,001) - (5,001)
Unfunded obligations (1,722) (435) (2,157) (984) (307) (1,291)
Unrecognized past service cost 5,420 - 5,420 6,657 - 6,657
Net unrecognized actuarial differences (2,214) - (2,214) (1,652) - (1,652)
Assets (provisions) in the balance sheet 1,583 (435) 1,148 (980) (307) (1,287)
Provisions for retirement - - - - - -
Provisions for future employee benefits 1,583 (435) 1,148 (980) (307) (1,287)
Change in assets (provisions) in the balance sheet
(€ thousands)
2010 2009
Retirement Other Total Retirement Other Total
Opening assets (provisions) (980) (307) (1,287) (4,737) (219) (4,956)
Current service cost after curtailments / settlements (3,050) (156) (3,206) (3,592) (107) (3,699)
Contributions 5,613 28 5,641 7,349 19 7,368
Closing assets (provisions) 1,583 (435) 1,148 (980) (307) (1,287)
Note 21 Debts and regularization accounts as of December 31, 2010
(€ thousands) AmountMaturity less
than one yearMaturity from one
to five yearsMaturity beyond
five years
Financial debts 2,047,756 1,053,121 404,775 589,860
Other debts 25,567 25,567 - -
Deferred revenue - - - -
Unrealized exchange rate gains 27,806 27,806 - -
Total 2,101,129 1,106,494 404,775 589,860
2072010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Statutory financial statements
The various bank overdrafts and the syndicated credit do not include any grants or guarantees from the Company to the benefit of the lending
banks.
The financial debts by foreign currency share out as follows:
(€ thousands) Amount
Euro 1,587,566
US Dollar 277,380
Pound Sterling 35,722
Japanese Yen 63,992
Other foreign currencies 83,096
Total 2,047,756
The analysis of the financial debts by nature and maturity is the following:
(€ thousands) AmountMaturity less
than one yearMaturity from one
to five yearsMaturity
beyond five years
Bonds 994,635 - 404,775 589,860
Commercial papers 18,500 18,500 - -
Bank loans 150,352 150,352 - -
Subsidiary loans 104,385 104,385 - -
Group financial current accounts 759,717 759,717 - -
Bank overdrafts and accrued interests 20,167 20,167 - -
Total 2,047,756 1,053,121 404,775 589,860
Note 22 Accrued receivables and payables
(€ thousands) Accrued receivables Accrued payables
Operating - 1,761
Financial 8,221 (1) 1,633
Total 8,221 3,394
(1) Accrued receivables mainly comprise accrued interests on financial instruments.
208 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Statutory financial statements
❚ OTHER INFORMATION
Note 23 Off balance sheet commitments
The significant off balance sheet commitments of the Company are detailed in Notes 24 to 28.
The syndicated credit renewed on March 15, 2007 for an authorized amount of €750.0 million is not guaranteed by the Group. It has not been
utilized over 2010 period.
As of December 31, 2010, the amount of bilateral multi-currencies credit lines confirmed and available for the benefit of Imerys is €537.0 million
of which €150.4 million are utilized.
Commitments given
(€ thousands)
For the benefit of
TotalSubsidiaries Equity interests Other controlled entities Other
Avals, sureties, guarantees 54,874 - 53,599 20,691 129,164
Commitments received
No commitments were received over 2010.
Note 24 Other commitments in relation to subsidiaries
Considering the commitments which came to maturity in 2010, the amount of the global commitment amounts to €95.4 million as of
December 31, 2010.
Note 25 Commitments on the foreign exchange rate risk
As of December 31, 2010, the Company had net commitments regarding forward purchases and sales against Euros divided up by foreign
currencies as follows:
(foreign currency thousands) (€ thousands)
Forward purchases Forward sales Forward purchases Forward sales
Australian Dollar 2,040 - 1,553 -
Canadian Dollar 8,390 - 6,298 -
Swiss Franc 8,285 37,600 6,626 30,070
Pound Sterling 6,440 3,015 7,482 3,503
Japanese Yen 3,556,700 - 32,735 -
Mexican Peso 95,950 25,580 5,798 1,546
New Zealand Dollar 4,770 150 2,773 87
Swedish Krona 269,000 7,500 30,004 837
Thai Baht - 391,000 - 9,734
US Dollar 24,010 185,320 17,969 138,692
South African Rand - 7,525 - 849
Czech Koruna 31,260 - 1,247 -
Danish Krone 3,900 2,015 523 270
Hungarian Forint - 100,500 - 362
Singapore Dollar 44,680 5,990 26,074 3,496
Polish Zloty 2,700 - 679 -
Total 139,761 189,446
These transactions have been carried out in order to hedge the foreign exchange rate risk generated by intra-group financing and investments
in foreign currencies. They also include the net positions between internal and external derivatives on transactions carried out in accordance
with the Group’s management policy of the foreign exchange rate risk.
2092010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Statutory financial statements
Note 26 Commitments on the interest rate risk
In accordance with its policy to manage the interest rate risk, the Group has, as of December 31, 2010, different hedging transactions (interest
rate swaps and caps). These transactions are in line with its management policy.
The nominal amount of derivative instruments at the end of the period amounts to €350.0 million, JPY7.0 billion and USD 460.0 million.
Note 27 Commitments on the energy price risk
The following table summarizes the positions taken as of December 31, 2010 to hedge the energy price risk:
Net notional amounts in MWh Maturities
Underlying position 3,656,416 < 12 months
Management transactions 1,942,533 < 12 months
Note 28 Elements recognized under more than one balance sheet item (net value)
(€ thousands) TotalOf which
controlled entities (1)
Investments 3,307,210 3,306,869
Loans related to direct investments and other subsidiaries 516,812 516,038
Other financial investments 2,263 -
Operating receivables 11,823 11,283
Financial debts 2,047,756 864,102
Other debts 25,567 4,802
(1) The controlled entities are those that can be consolidated by full integration into the same group.
Note 29 Main shareholders
Number of shares % of interest % of voting rights (1)
Pargesa Netherlands BV 19,348,412 25.64% 32.56%
Belgian Securities BV (2) 23,201,353 30.74% 37.76%
M&G Investment Management Ltd (3) 4,890,722 6.48% 4.35%
Vanguard Precious Metal and Mining Funds (4) 3,900,000 5.17% 3.47%
Group employees 210,215 0.28% 0.36%
Self-holding 136,373 0.18% -
Public 23,787,080 31.51% 21.50%
Total as of December 31, 2010 75,474,155 100.00% 100.00%
(1) Total net voting rights: 112,234,846.
(2) A 100% subsidiary of Groupe Bruxelles Lambert.
(3) M&G Investment Management Limited belongs to the Prudential Plc group (Great Britain).
(4) Vanguard Precious Metal and Mining Funds belongs to The Vanguard Group, Inc. (United States).
The consolidated financial statements of Imerys are included in the consolidation structure of the companies Pargesa Holding SA and Groupe
Bruxelles Lambert, which are respectively the parent companies of Pargesa Netherlands BV and Belgian Securities BV.
210 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Statutory financial statements
Note 30 Headcount as of December 31, 2010
Non-executives Executives Total
Full-time 28 99 127
Part-time 3 1 4
Total employees of the entity 31 100 131
Note 31 Individual training rights as of December 31, 2010
As of December 31, 2010 the total number of training hours corresponding to the acquired rights in the framework of the individual training
right amounts to 8,695 hours.
The number of hours not having been requested amounts to 7,421 hours.
Note 32 Compensation of directors and executive managers
(€ thousands) 2010 2009
Board of Directors (1) 642 624
Executive Management 2,341 1,889
Total 2,983 2,513
(1) Directors’ attendance fees.
The global amount of retirement obligations contracted for the benefit of the members of the Board of Directors and of the Executive Management
is presented in Note 20 to the statutory financial statements.
Note 33 Post closing events
No significant post closing event has to be notified for the Company.
Note 34 Allocation of earnings (pursuant to the provisions of article L. 232-7 of the French Code of Commerce) (1)
(€)
Income for the period 83,645,324.81
Increase in legal reserve in order to reach 10% of the share capital (16,931.80)
Retained earnings 369,029,828.11
Distributable income 452,658,221.12
Dividend of €1.20 to each of the 75,474,155 shares existing as of January 1, 2011 (90,568,986.00)
Retained earnings 362,089,235.12
(1) Which will be proposed to the Shareholders’ General Meeting on April 28, 2011.
2112010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS
5
Statutory financial statements
Note 35 Table of subsidiaries and equity interests as of December 31, 2010
Local units (thousands)
Number of shares held by Imerys Type of securitiesCapital
Shareholders’ equity other than
share capital
Subsidiaries (at least 50% of equity held by Imerys)
Imerys TC 161,228 713,653 80,613,850 shares of €2
Mircal 1,034,653 273,979 68,976,891 shares of €15
Imerys USA 526,005 523,130 1,000 shares of USD1
Imerys Services 38 (635) 2,499 shares of €15
Mircal Europe 56,365 555,156 56,365,195 shares of €1
Mircal China 12,937 (1,092) 1,293,700 shares of €10
Mircal Chili 1,554 13,943 1,554,000 shares of €1
Imerys (SHANGHAI) Investment Management Company Limited 14,404 3,723 1 share of CNY14,404,000
% of interest held by Imerys
(€ thousands)
Gross amount of securities
held
Net amount of securities
held
Loans and advances
granted by Imerys and not repaid
Borrowings taken up by Imerys and not repaid
Sureties, avals given
by Imerys
Dividends collected
by Imerys in 2010
2010 sales
2010 net income or
loss
Subsidiaries (at least 50% of equity held by Imerys)
Imerys TC 100.00 758,369 758,369 - 104,380 - 83,032 395,204 83,752
Mircal 100.00 1,289,076 1,289,076 - 52,109 - - 1 17,956
Imerys USA 100.00 663,837 663,837 30,261 32,510 54,874 - - 16,875
Imerys Services 99.96 38 38 1,234 - - - 12,220 (232)
Mircal Europe 100.00 565,483 565,483 - 35,854 - 20,292 - 15,025
Mircal China 100.00 12,937 12,937 3,345 535 - - - 1,640
Mircal Chili 100.00 15,540 15,540 - 526 - - - (2)
Imerys (SHANGHAI) Investment
Management Company Limited 100.00 1,359 1,359 637 - - - 4,416 169
Equity interests
10 to 50% of equity held by Imerys 10 10 - - - 60 - -
Miscellaneous equity interests
Non-significant French entities 3,564 561 774 169 - - - -
Total 3,310,213 3,307,210 36,251 226,083 54,874 103,384 411,841 135,183
212 2010 REGISTRATION DOCUMENT IMERYS
FINANCIAL STATEMENTS5Audit fees
5.3 I AUDIT FEES
Terms of service of Auditors
The Shareholders’ General Meeting of April 29, 2010 approved the
renewal of the term of office of ERNST & YOUNG et Autres and
Deloitte & Associés for another 6 years.
Organization of the audit of Imerys subsidiaries
For numerous years, the Group has primarily asked, in an equal
standing, the two Imerys Statutory Audit firms to conduct the audit
of the subsidiaries throughout the world. However, for practical or
historical reasons, other audit firms intervened; the quantitative
details were as follows:
2010 2009 2008 2007 2006
Audit fees (€ millions) 6.1 6.4 7.1 6.9 6.7
Distribution
ERNST & YOUNG et Autres 50% 53% 55% 53% 52%
Deloitte & Associés 46% 43% 40% 43% 44%
Other firms 4% 4% 5% 4% 4%
Fees as of December 31, 2010
The total fees paid in 2010 to the two Statutory Audit firms of the parent company Imerys, ERNST & YOUNG et Autres (EY) and Deloitte
& Associés (DA), are as follows:
(€ millions)
2010 2009
EY DA EY DA
(€M) (%) (€M) (%) (€M) (%) (€M) (%)
Audit
Certification and auditing of individual
and consolidated accounts 2.8 2.3 3.2 2.3
Imerys SA 0.8 0.6 1.0 0.6
Fully integrated subsidiaries 2.0 1.7 2.2 1.7
Other duties and services directly related
to the audit mission 0.2 0.5 0.2 0.5
Imerys SA - 0.3 0.2 0.2
Fully integrated subsidiaries 0.2 0.2 - 0.3
Subtotal 3.0 93.7% 2.8 93.3% 3.4 94.4% 2.8 96.6%
Other services rendered by the network
to fully integrated subsidiaries
Legal, fiscal, social 0.2 0.2 0.2 0.1
Other (to specify if > 10% of audit fees) - - - -
Subtotal 0.2 6.3% 0.2 6.7% 0.2 5.6% 0.1 3.4%
Total 3.2 100.0% 3.0 100.0% 3.6 100.0% 2.9 100.0%
66.1 INFORMATION CONCERNING THE COMPANY 214
6.2 INFORMATION CONCERNING THE SHARE CAPITAL 2166.2.1 Share capital as of December 31, 2010 216
6.2.2 Changes in share capital over the past fi ve years 216
6.2.3 Financial authorizations 217
6.2.4 Share buyback programs 221
6.2.5 Employee shareholder plans 221
6.3 SHAREHOLDING 2226.3.1 Distribution of share capital and voting rights over the past three years 222
6.3.2 Crossing of thresholds 222
6.3.3 Shareholders’ agreement 223
6.3.4 Identifi cation of bearer shareholders 223
6.3.5 Group shareholding structure 223
6.4 ELEMENTS WHICH COULD HAVE AN IMPACT IN THE EVENT OF A TAKEOVER BID 224
6.5 IMERYS STOCK EXCHANGE INFORMATION 2256.5.1 Highest and lowest market prices from 2006 to 2010 225
6.5.2 Trades since January 2009 226
6.6 PARENT COMPANY/SUBSIDIARIES ORGANIZATION 227
6.7 DIVIDENDS 227
6.8 SHAREHOLDER RELATIONS 228
ADDITIONAL
INFORMATION
214 2010 REGISTRATION DOCUMENT IMERYS
ADDITIONAL INFORMATION 6Information concerning the Company
6.1 | INFORMATION CONCERNING THE COMPANY
❚ CORPORATE NAME: IMERYS
This name was adopted by the Ordinary and Extraordinary
Shareholders’ Meeting of September 22, 1999. Until then, the
Company’s corporate name was Imetal.
❚ REGISTERED OFFICE
154, rue de l’Université, 75007 Paris (France)
Telephone: + 33 (0) 1 49 55 63 00
❚ REGISTRATION
562 008 151 R.C.S. Paris - SIRET 562 008 151 00093
N.A.F. (code of main activity): 7010Z
❚ LEGAL STATUS AND LAW OF INCORPORATION
Imerys is a French Limited Liability Company (Société Anonyme) with
Board of Directors (Conseil d’Administration) governed by French law.
❚ DATE AND TERM OF INCORPORATION
Imerys was incorporated on April 22, 1880. Its term of incorporation,
initially set at fifty years, was extended until June 30, 2024 (article 5
of the by-laws).
❚ CORPORATE PURPOSE (ARTICLE 3 OF THE BY-LAWS)
Imerys is the head company of an industrial and commercial group
that is specialized in Minerals Processing.
Under the terms of article 3 of the by-laws, “The Company’s purpose,
in France and abroad, is as follows:
p the search for, the acquisition, the leasing, the sale and the
operation of any mines and quarries, of any kind whatsoever;
p the processing and transformation of, and trading in, any minerals,
metals, organic or non-organic materials and mineral substances,
as well as their by-products and alloys;
p the manufacturing of any processed products in which minerals,
metals, organic or non-organic materials and mineral substances
are used;
p the purchase, obtaining, operation, concession and sale, in whole
or in part, on a temporary or permanent basis, of any patents,
certificates or licenses pertaining to the above-mentioned
purposes;
p the creation, acquisition, sale, concession of any buildings and
plants, of any means of transportation and energy sources;
p the participation in any country, in any mining, quarrying,
commercial, industrial and maritime operations aimed at favoring
or developing the Company’s own industries and businesses,
through the creation of new companies, alliances, holding
companies or otherwise; and, generally, any mining, quarrying,
commercial, industrial, maritime, real estate, personal property
and financial operations relating directly or indirectly, in whole
or in part, to any of the above-specified purposes or any other
similar or related purposes.”
❚ FINANCIAL YEAR (ARTICLE 28 OF THE BY-LAWS)
The financial year is 12 months. It begins on January 1 and ends on
December 31 of each year.
❚ BOARD OF DIRECTORS (ARTICLES 12 AND 13 OF THE
BY-LAWS)
The Company is managed by a Board of Directors of at least three
members and no more than eighteen members, except for any
dispensation provided by law.
Directors are appointed or renewed by the Ordinary General Meeting
of the Shareholders, which may dismiss them at any time. The term of
office of the Directors is three years. The term of office of a Director
shall expire at the close of the Ordinary General Meeting of the
Shareholders that rules on the financial statements for the previous
financial year and which is held in the year during which the term
of office expires.
For more details regarding composition, powers and functioning of
the Board of Directors, please see section 3.1 of chapter 3 of the
Registration Document.
❚ SHAREHOLDERS’ GENERAL MEETINGS (ARTICLES 21 AND 22 OF THE BY-LAWS)
Convening
Shareholders’ General Meetings are convened under the terms and
conditions provided by current legal provisions and are held either
at the registered office or in any other place specified on the Notice
of Meeting.
Conditions for admission
All shareholders have the right to take part in Shareholders’ General
Meetings – whether in person, via a proxy or by correspondence –
subject to the obligation to prove their identity and, in the case of
holders of bearer shares, to deposit a certificate of holding justifying
the recording of the bearer shares. Registration or deposit formalities
must be completed three business days before the meeting at
the latest. Any shareholder may also, by decision of the Board of
Directors as notified in the Notice of Meeting, take part in General
Meetings and vote by data transmission and/or any other means of
telecommunication, under the conditions provided by current legal
provisions.
215IMERYS 2010 REGISTRATION DOCUMENT
ADDITIONAL INFORMATION
6
Information concerning the Company
Conditions for exercise of voting rights
All documents provided by articles R. 225-81 and R. 225-83 of the
French Code of Commerce, including a mail or proxy voting form,
are sent to shareholders on request. This form cannot be validly
taken into consideration unless it is completed in accordance with
current legislation and returned to the registered office or to the
address given on the Notice of Meeting. Moreover, any shareholder
may, by decision of the Board of Directors as notified in the Notice
of Meeting, obtain and return the form for voting by mail or proxy, by
data transmission or any other means of telecommunication, under
the terms and conditions provided by current legal provisions.
Double voting rights
As of the Shareholders’ General Meeting of July 2, 1968, shares
registered in the name of the same shareholder for at least two
years carry a double voting right. This right is authorized by law and
provided by article 22 of the by-laws, and is intended to reward the
Company’s shareholders for their loyalty. The double voting right is
also granted to new free shares granted to shareholders under a
capital increase operation, on the basis of the old shares for which
they already benefited from this right. The double voting right ceases
ipso jure when a registered share is converted to a bearer share or is
transferred, except in cases of collateral assignment or transfer as life
interest or by inheritance or family bequest. Finally, the double voting
right may be cancelled by decision of an Extraordinary Shareholders’
General Meeting with prior authorization by the Special General
Meeting of the holders of such right.
Restriction of voting rights
None.
❚ ALLOCATION OF PROFITS (ARTICLE 30 OF THE BY-LAWS)
Income for each financial year is determined in accordance with legal
and regulatory provisions in force, as follows:
p at least 5% of net earnings for the financial year, minus any
previous losses, are withheld to make up the legal reserve. This
withholding ceases to be obligatory when such reserve is equal
to 10% of the share capital;
p earnings for the financial year, minus the above and plus any
earnings carried over, after deduction of any earnings retained
or sums assigned to one or more reserves by the Shareholders’
Meeting, are distributed among shares, without distinction;
p the Shareholders’ Meeting may grant to each shareholder, for
all or part of the dividend being distributed, or for advances on
dividends, the option to be paid in cash or in shares.
❚ IDENTIFIABLE BEARER SHARES
(ARTICLE 9 OF THE BY-LAWS)
The Company is authorized, under the terms and conditions provided
by current legal provisions, to ask Euroclear France for the information
needed to identify the owners of bearer shares that grant, whether
immediately or at a later date, voting rights in its Shareholders’
Meetings, as well as the quantity of shares or other securities held
by each owner and, as the case may be, any restrictions that may
apply to such shares or other securities.
❚ DISCLOSURE OF THRESHOLD CROSSINGS
Imerys’ by-laws do not contain any clause imposing disclosure
requirements in the case of holdings that cross certain thresholds,
other than those set down by the law.
Any shareholder, whether acting alone or with others, whose holding
comes to rise above or fall below one of the holding thresholds for
the Company’s capital and/or voting rights provided by legislation in
force must comply with the provisions of articles L. 233-7 and seq.
of the French Code of Commerce and, more specifically, inform the
Company (or, as the case may be, any person that the Company
may have designated for that purpose) and the Autorités des
marchés financiers (AMF), within five days of their holding crossing
the threshold in question. In the event of failure to comply with this
obligation, the provisions of article L. 233-14 of the French Code of
Commerce shall apply.
❚ DOCUMENTS ACCESSIBLE TO THE PUBLIC
The by-laws, minutes of Shareholders’ General Meetings, statutory
and consolidated financial statements, Statutory Auditors’ Reports
and all documents put at the shareholders’ disposal may be
consulted at the Company’s registered office or on the Company’s
website (www.imerys.com – section the Group/publications and
regulated information).
216 2010 REGISTRATION DOCUMENT IMERYS
ADDITIONAL INFORMATION 6Information concerning the share capital
6.2 | INFORMATION CONCERNING THE SHARE CAPITAL
6.2.1 SHARE CAPITAL AS OF DECEMBER 31, 2010
p On April 29, 2010, the Board of Directors decided to create 42,984
new shares and thus to increase the Company’s share capital by
a nominal amount of €85,968 by incorporation of reserves, with
a view to serving an equivalent number of free shares definitely
acquired on that date.
p On December 16, 2010, the Board of Directors, as part of the
share buy-back programs authorized by the Shareholders’
General Meetings of April 29, 2009 and April 29, 2010, cancelled
171,627 self-held shares directly acquired on the market by the
Company and totally allocated to the cancellation objective. This
cancellation of shares led to a share capital decrease of the
Company by a nominal amount of €343,254.
p On January 10, 2011, the Chief Executive Officer, pursuant to
the delegation of powers given to him by the Board of Directors
on December 16, 2010, acknowledged that, on December 31,
2010, the share capital had been increased by a nominal amount
of €426,604 as a result of the exercise in 2010 of 213,302 stock
options giving the right to the same number of Imerys shares.
As a result of those operations, Imerys’ fully-paid up share capital
as on December 31, 2010 totaled €150,948,310; it was made up of
75,474,155 shares with €2 par value of which 36,897,864 enjoyed
double voting rights pursuant to article 22 of Imerys’ by-laws. Finally,
the total number of theoretical voting rights attached to existing
shares was 112,372,019.
Taking into account the 4,170,563 stock options and 488,429 free
shares granted to certain employees and executive corporate officers
and not yet exercised or acquired on December 31, 2010, maximum
potential dilution of the Company’s share capital was 5.81% as on
this date (i.e. a nominal amount of €160,266,294).
No directly registered shares have been pledged by the Company.
Share capital did not change and the number of voting rights did not
change significantly between December 31, 2010 and the date of
the present Registration Document.
Nevertheless, the project of reclassification of Imerys shares within
the Pargesa-GBL group which was announced on March 21, 2011
(see paragraph 6.3.5 of the present chapter), would entail, subject
to its completion, the loss of double voting rights attached to the
Pargesa Netherlands BV’s stake and would reduce accordingly the
total number of voting rights of the Company.
6.2.2 CHANGES IN SHARE CAPITAL OVER THE PAST FIVE YEARS
Changes in the number of shares and in the Company’s share capital over the past five years are as follows:
Year Operation
Nominal amount of change in
capital (in €)
Issue premium
(in €)
Number of shares
created
Par valueof shares
(in €)
Successive amounts
of the Company’s
capital (in €)
Number of shares that
make up capital
2006 Cancellation of shares (2,650,000) (80,805,619) (1,325,000) 2 125,293,730 62,646,865
Capital increase reserved for employees 100,000 2,607,402 50,000 2 125,393,730 62,696,865
Exercise of stock options 1,275,510 17,689,386 637,755 2 126,669,240 63,334,620*
2007 Cancellation of shares (1,213,086) (40,885,873) (606,543) 2 125,456,154 62,728,077
Exercise of stock options 797,558 13,645,455 398,779 2 126,253,712 63,126,856*
2008 Cancellation of shares (740,000) (16,782,710) (370,000) 2 125,513,712 62,756,856
Exercise of stock options 59,468 882,325 29,734 2 125,573,180 62,786,590*
2009 Exercise of stock options 2,000 26,310 1,000 2 125,575,180 62,787,590
Share capital increase 25,115,036 226,035,324 12,557,518 2 150,690,216 75,345,108
Exercise of stock options 88,776 1,207,985 44,388 2 150,778,992 75,389,496*
2010 Capital increase by incorporation of reserves 85,968 0 42,984 2 150,864,960 75,432,480
Cancellation of shares (343,254) (6,719,326) (171,627) 2 150,521,706 75,260,853
Exercise of stock options 426,604 5,663,150 213,302 2 150,948,310 75,474,155*
(*) As on December 31.
217IMERYS 2010 REGISTRATION DOCUMENT
ADDITIONAL INFORMATION
6
Information concerning the share capital
6.2.3 FINANCIAL AUTHORIZATIONS
❚ SECURITIES REPRESENTING SHARE CAPITAL
General authorizations
A set of financial authorizations was granted to the Board of
Directors, in accordance with the provisions of articles L. 225-129
et seq. of the French Code of Commerce, for a twenty-six months
period, by the Ordinary and Extraordinary Shareholders’ General
Meeting of April 29, 2009. These financial authorizations are intended
to allow the Company, if necessary, to increase its share capital at
the appropriate time either by capitalization of reserves, income and
issue, share or other premiums, or by the issue of various securities
granting access, immediately or in the future, to Imerys’ share capital
with or without preemptive subscription rights.
The maximum nominal amount (1) of the capital increases that may
be carried out in this way was set at:
p €80 million for the issues carried out with preemptive subscription
right;
p €50 million for the issues carried out without preemptive
subscription right;
p €130 million in total for all such issues.
Furthermore, the maximum global nominal amount of debt securities
that may be issued under these authorizations was set at €1 billion.
It is stipulated that the issuances made with cancellation of the
preemptive subscription right that might be decided pursuant to
these delegations would be carried out pursuant to the provisions of
article L. 225-136, al.1 of the French Code of Commerce. As a result,
the rules for the calculation of the price shall be set in accordance
with the provisions of article R. 225-119 of the French Code of
Commerce (price at least equal to the weighted average price of
the three most recent trading sessions preceding the determination
of such price, potentially reduced by a maximum discount of 5%).
Moreover, the Board of Directors was authorized by the Ordinary and
Extraordinary Shareholders’ General Meeting of April 29, 2009 to:
p set, in accordance with provisions of article L. 225-136 of the
French Code of Commerce, the issue price of the various
securities that may be issued in the event of cancellation of
shareholders’ preemptive subscription rights, within the limit of
10% of the Company’s share capital per year. It is specified that
this issue price would be at least equal to the closing price for
Imerys shares on the trading day before the date of setting the
issue price, minus a possible 10% discount;
p carry out, pursuant to provisions of article L. 225-147 of the French
Code of Commerce, one or more capital increases, within the limit
of 10% of the share capital, in order to compensate, except in the
case of a public exchange offer, contributions in kind made to the
Company and comprised of securities that give access to capital,
including in a company of which the shares are not admitted for
trading on a regulated market;
These authorizations and the opportunities they offer are useful in
giving Imerys access, within the best possible timeframe and in line
with the best possibilities on the financial market, to any new financial
resources that may be necessary when the time comes.
Pursuant to the powers granted by the Shareholders’ General
Meeting, the Board of Directors delegated to the Chief Executive
Officer the specific powers needed to carry out increases of the
Company’s capital by capitalization of reserves, income and issue,
share or other premiums within the limit of a maximum nominal
amount of €10 million.
It is reminded that the Board of Directors used on April 29, 2009
the delegation of authority granted on the same day by the Ordinary
and Extraordinary Shareholders’ General Meeting in order to decide
a share capital increase of the Company by the issue of common
shares with shareholders’ preemptive subscription rights. The
conditions of this share capital increase were as follows: issue of
12,557,518 shares with a nominal value of €2 each, at a unit price of
€20 (i.e. a share premium of €18 per share), at the rate of one new
share for five existing shares.
On June 2, 2009, the Chief Executive Of f icer noted that
12,432,521 shares were subscribed on an irreducible basis and
124,997 shares on a non-preferential basis and as a consequence,
all the 12,557,518 new shares were issued and fully paid-up, leading
to a nominal share capital increase of €25,115,036 and a final gross
of €251,150,360.
None of the delegations of authority described above were used in
financial 2010.
Since all these delegations will expire on June 28, 2011, their
renewal will be proposed to the Shareholders’ General Meeting of
April 28, 2011 (see chapter 7, paragraph 7.1.5 and section 7.4 of the
Registration Document).
According to the opportunity given by the French Order no. 2009-80
of January 22, 2009, it will be also proposed to the Shareholders’
General Meeting of April 28, 2011 to delegate its authority to the
Board of Directors in order to carry out capital increases through
issue of shares or securities giving access to the Company’s share
capital, by private investments. These share capital increases would
be carried out with cancellation of preemptive subscription rights in
favor of qualified investors or a limited circle of investors as defined
in article L. 411-2 of the French Monetary and Financial Code. The
annual global ceiling of such capital increases would be set at 20%
of the share capital according to the applicable law. It is specified
that the nominal amount of the securities to be issued pursuant to
this delegation would be charged to the new nominal amount of
€37 million set for the share capital increases that may be carried
out with cancellation of preemptive subscription rights. Last, the
subscription price of the shares that may be issued pursuant to this
delegation, shall be set in accordance with the provisions of article
R. 225-119 of the French Code of Commerce and shall be at least
equal to the weighted average price of the three most recent trading
(1) To which amount shall be added, as the case may be, the additional amount of any shares to be issued to maintain, in accordance with the law, the rights of
holders of securities or rights giving access to capital.
218 2010 REGISTRATION DOCUMENT IMERYS
ADDITIONAL INFORMATION 6Information concerning the share capital
sessions preceding the determination of such price, potentially
reduced by a maximum discount of 5%.
Specific authorizations in favor of the Group’s employees and/or corporate officers with cancellation of shareholders’ preemptive subscription rights
Capital increases reserved for Group employees
The Shareholders’ General Meeting held on April 29, 2009 delegated
to the Board of Directors its authority to carry out capital increases
reserved for employees that join the Group Savings Plan adopted
on September 1, 2000, as last amended on September 21, 2006.
The maximum nominal amount of capital increases that may be
carried out in this way by the issue of shares is set at €1.6 million, i.e.
a maximum of 800,000 shares; the price of the shares to be issued
must be determined in accordance with the provisions of article
L. 3332-19 of the Labor Code.
This delegation, which was not used in financial 2010 will expire
on June 28, 2011. Its renewal on similar terms will be proposed to
the Shareholders’ General Meeting of April 28, 2011 (see chapter 7,
paragraph 7.1.6 and section 7.4 of the Registration Document).
Stock options and free share grants
The Ordinary and Extraordinary Shareholders’ General Meeting of
April 30, 2008 authorized the Board of Directors to grant to employees
and corporate officers of the Group, or to certain categories of them:
p options for the subscription of new shares or the purchase of
existing shares of the Company, and
p free shares of the Company.
Moreover, the Ordinary and Extraordinary Shareholders’ General
Meeting of April 30, 2008 authorized the Board of Directors to:
p set the terms and conditions under which the share subscription
or purchase options would be granted, and, in particular,
determine their subscription (1) or purchase
(2) price within the limits
and in the conditions provided by the law;
p set the conditions, and as the case may be, the criteria for
the grant of free shares and determine the acquisition and
conservation periods of these shares, in compliance with the
minimum times required by the regulation in force.
The maximum nominal amount of the shares likely to be covered by
the options granted under this authorization, combined with that of
the shares granted under free allotments by the Company, is set at
3,700,000 i.e. a cumulated nominal amount of €7.4 million.
To date, the Board of Directors has used these two authorizations to
grant to employees and corporate officers of the Group:
p in 2008: a total number of 594,157 stock options and free shares
representing a global nominal amount of €1,188,314. This amount
was increased to €1,275,536 further to the adjustments made by
the Company upon completion of the share capital increase of
June 2, 2009, pursuant to the provisions of article L. 228-99 of
the French Code of commerce, in order to uphold the rights of
the beneficiaries of stock options and free shares;
p in 2009: a total number of 711,006 stock options and conditional
free shares;
p in 2010: a total number of 751,500 stock options and conditional
free shares (for more details regarding all these grants, see
chapter 3 sections 3.4 and 3.5 of the Registration Document).
Considering these grants, the aggregate balance of the current
authorizations given to the Board of Directors as on December 31,
2010, was €3,199,452, i.e. 1,599,726 stock options or free shares.
These two authorizations expiring on June 29, 2011, their renewal on
similar terms will be proposed to the Shareholders’ General Meeting
of April 28, 2011 (see chapter 7, paragraph 7.1.6 and section 7.4 of
the Registration Document).
Share subscription and/or acquisition warrants
In order to enhance and diversify the instruments enabling the
Company to involve the Group’s employees and top managers in its
development, the Shareholders’ General Meeting of April 29, 2010
fully empowered the Board of Directors to carry out capital increases,
without shareholders’ preemptive subscription rights, by the issue of
share subscription and/or acquisition warrants (“BSA”), whether or
not redeemable by the Company, that are reserved for the employees
and corporate officers of the Group, or to certain categories of them.
The total nominal amount of the shares that may be issued pursuant
to the present delegation was set by the Shareholders’ General
Meeting at €4,700,000, i.e. a maximum total number of 2,350,000
shares, this amount being charged to the total nominal amount of
shares that may be the subject of share subscription or acquisition
options or free grants.
This Shareholders’ General Meeting also authorized the Board
of Directors to set the issue price of the BSA in accordance with
regulations in force on the day of issue; the subscription for the
shares to which the warrants would give the right would be equal to
(1) Pursuant to the provisions of article L. 225-177 of the French Code of Commerce, the exercise price of options may not be less than 80% of the average price
listed for the shares on the twenty stock market trading days preceding the date of grant. It is specified that since 1999 the policy of the Company for the granting
of share subscription options has excluded any discount.
(2) Pursuant to the provisions of article L. 225-179 of the French Code of Commerce, the price of the share on the date of grant may not be less than 80% of the
average purchase price of the shares held by the Company. It is specified that, as of today, the Company did not grant any share purchase options.
219IMERYS 2010 REGISTRATION DOCUMENT
ADDITIONAL INFORMATION
6
Information concerning the share capital
the average closing price for shares in the Company for the twenty
stock market trading days prior to the day of the decision to issue
the warrants.
This delegation of authority expiring on June 28, 2011, its renewal on
similar terms will be proposed to the Shareholders’ General Meeting
of April 28, 2011 (see chapter 7, paragraph 7.1.6 and section 7.4 of
the Registration Document).
Share buyback authorization
The Shareholders’ General Meeting of April 29, 2010 renewed,
for a new eighteen months period, i.e. until October 28, 2011,
the authorization previously granted to the Board of Directors by
the Shareholders’ General Meeting of April 29, 2009 to allow the
Company to buy back its own shares, pursuant to the provisions of
articles L. 225-209 et seq. of the French Code of Commerce, within
the limit of 10% of the total number of shares issued and outstanding
on January 1, 2010, i.e. 7,538,949 shares, and within the limit of a
total purchase volume of €603 million. This Shareholders’ General
Meeting also decided that the number of shares that may be held,
whether directly or indirectly, at any time whatsoever, shall not exceed
10% of the shares making the capital. Last, the maximum purchase
price was set at €80 per share.
The objective of this authorization is to enable the Company to make
purchases of its own shares:
p for the purpose of the subsequent cancellation of the shares
acquired by reducing the Company’s capital, in particular in order
to offset the dilution impact on the shareholders likely to result
from the grant of stock options and/or free shares;
p in order to ensure the liquidity of the market through an investment
services firm acting in the name and on behalf of the Company,
under a liquidity contract in accordance with a code of conduct
recognized by AMF;
p with respect to employees’ participation in shareholding plans
set up by the Company or for the purposes of delivery to certain
employees and corporate officers of the Group of the shares
resulting from the exercise of stock purchase options or free
shares allotment;
p for the delivery or exchange of shares, in particular with respect
to external growth operations;
p and in general, for any purposes that are permitted or may come
to be authorized by current regulations.
The acquisition, sale, transfer or exchange of the shares may be
carried out, in compliance with the regulations in force, on the market
or by mutual agreement and by any means, including the transfer
of blocks and the use or exercise of any financial instrument or
derivative.
For details of the operations carried out under the share buyback
programs in force during the past financial year, please see
paragraph 6.2.4. of the present chapter.
As this authorization will expire on October 28, 2011, its renewal
on a similar basis will be proposed at the next General Meeting
(see chapter 7, paragraph 7.1.4 and section 7.4 of the Registration
Document).
Cancellation of Company shares
The Ordinary and Extraordinary Shareholders’ General Meeting of
April 29, 2009 granted the Board of Directors the authorization to
cancel Company shares held with respect to the share buyback
programs authorized by its shareholders, within the limit of 10%
of capital per 24-month period and to reduce the share capital
accordingly.
The Board of Directors used this authorization to cancel on
December 16, 2010, 171,627 self-held shares acquired during
financials 2009 and 2010.
As this authorization will expire on June 28, 2011, its renewal on
a similar basis will be proposed at the next General Meeting (see
chapter 7, paragraph 7.1.4 and section 7.4 of the Registration
Document).
❚ OTHER SECURITIES
As the decision to issue ordinary bonds is within the competence
of the Board of Directors in accordance with article L. 228-40 of the
French Code of Commerce, the Board of Directors delegated on
April 29, 2010 full powers to the Chief Executive Officer, and with
the agreement of the latter to the Chief Operating Officer for the
purposes of carrying out such issues and deciding their conditions,
within the period of one year and the initial limit of a maximum annual
nominal amount of €1.5 billion and a maximum nominal amount per
operation of €350 million.
Moreover, the Shareholders’ General Meeting of April 29, 2009
authorized the Board of Directors to issue, in accordance with the
provisions of article L. 228-91 of the French Code of Commerce, in
one or more times, any compound securities representing debts of
the Company, within the global limit of €1 billion, it being specified
that the nominal amount of the securities to be issued pursuant to
this authorization shall be charged to the maximum global nominal
amount of the debt securities that may be issued pursuant to the
authorizations and delegations of authorities granted to the Board
of Directors and mentioned above.
This authorization expiring on June 28, 2011, its renewal will be
proposed to the Shareholders’ General Meeting of April 28, 2011
(see chapter 7, paragraph 7.1.5 and section 7.4 of the Registration
Document).
It is specified that none of these authorizations was used in 2010.
An overview of all the financial authorizations granted to the Board
of Directors and existing at the date of the present Registration
Document is set out in the table below.
220 2010 REGISTRATION DOCUMENT IMERYS
ADDITIONAL INFORMATION 6Information concerning the share capital
Table summarizing existing financial authorizations
Type of issueDate of
authorization
Expiry of authorization
(duration)
Nominal maximum amount of
capital increase that may result, immediately or
in the future, from the issue
(excluding adjustments)
Potential dilution (1) that
may result from the use of
authorizations (2)
Use of existing
authorizations (amount)
Maximum amount of
issue of loan instruments (3)
General authorizations
All securities, with preemptive subscription rights (4) April 29, 2009
June 28, 2011
(26 months) €80 million 34.64% 25.11 million €1,000 million
All securities, without preemptive subscription rights
and with, as the case may be, a priority period granted
by the Board of Directors (5) April 29, 2009
June 28, 2011
(26 months) €50 million 24.88% - €1,000 million
Capitalization of reserves, earnings and issue or share
premiums (6) April 29, 2009
June 28, 2011
(26 months) n/a n/a - n/a
Compensation for contributions in kind made
of securities representing shares in or giving access
to capital (7) April 29, 2009
June 28, 2011
(26 months) €15.09 million (8) 9.09% - €1,000 million
Overall limit of general authorizations €130 million 46.27% - €1,000 million
Specific authorizations in favor of employees and corporate officers with cancellation of preemptive subscription rights
Shares reserved for Group employees that joined a
company or Group savings plan (9) April 29, 2009
June 28, 2011
(26 months) €1.6 million 1.05% - n/a
Share subscription and/or acquisition options (10) and
free share (11) grants April 30, 2008
June 29, 2011
(38 months) €7.4 million 4.67% €4.2 million n/a
Share subscription and/or acquisition warrants (12)
April 29, 2010
June 28, 2011
(14 months) €4.7 million (13) 3.02%
Overall limit of specific authorizations in favor
of employees and corporate officers €9 million 5.63% - n/a
Authorized total €139 million 47.94% €1,000 million
(1) The dilution is calculated on the basis of the nominal maximum amount of capital increases that may result from the use of the authorizations.
(2) Based on current par value of €2 per share and the amount of share capital as on December 31, 2010.
(3) Maximum nominal amount of securities representing debts of the Company that may give access to ordinary shares.
(4) In accordance with the provisions of articles L. 225-129 et seq. and L. 228-91 et seq. of the French Code of Commerce.
(5) In accordance with the provisions of articles L. 225-129 et seq., L. 225-135 et seq., and L. 228-91 et seq. of the French Code of Commerce.
(6) In accordance with the provisions of articles L. 225-129 et seq. and L. 228-130 of the French Code of Commerce.
(7) In accordance with the provisions of article L. 225-147 of the French Code of Commerce.
(8) i.e. 10% of share capital as on December 31, 2010.
(9) In accordance with the provisions of articles L. 225-129 et seq. and L. 225-138 of the French Code of Commerce, and L. 3332-1 et seq.
of the French Labor Code.
(10) In accordance with the provisions of articles L. 225-177 et seq. of the French Code of Commerce.
(11) In accordance with the provisions of articles L. 225-197-1 et seq. of the French Code of Commerce.
(12) In accordance with the provisions of articles L. 225-129 et seq., L. 225-138 and L. 228-91 et seq. of the French Code of Commerce.
(13) Global maximum amount to be charged to the global nominal amount of stock options or free shares that may be granted.
221IMERYS 2010 REGISTRATION DOCUMENT
ADDITIONAL INFORMATION
6
Information concerning the share capital
❚ LEGAL FRAMEWORK OF SHARE BUYBACK PROGRAMS IMPLEMENTED IN 2010
As described in paragraph 6.2.3. of the present chapter, the
Shareholders’ General Meeting of April 29, 2010 renewed in favor
of the Board of Directors and for a period of 18 months, i.e. until
October 28, 2011, the authorization previously granted by the
Shareholders’ General Meeting held on April 29, 2009 for the
Company to buy back its own shares, in accordance with articles
L. 225-209 et seq. of the French Code of Commerce. In accordance
with articles L. 225-209 al. 3 of the French Code of Commerce, the
Board of Directors delegated to the Chief Executive Officer as well
as to the Chief Operating Officer on April 29, 2010 all powers for the
purposes of purchasing the Company’s shares, in the conditions and
within the limits set by the Shareholders’ General Meeting.
❚ OPERATIONS CARRIED OUT IN 2010 *
In accordance with article L. 225-211 of the French Code of
Commerce, the following operations were carried out with respect
to the Company’s share buyback programs in force in 2010.
It is reminded that since the termination in 2008 of the liquidity
contract entered into with an investment services firm, the purchases
made within the framework of share buyback programs implemented
by the Company are carried out directly and exclusively on the market
by the latter.
Transactions made out from January 1 until April 29, 2010 within the frame of the previous share buyback program
No purchase or sale transaction was made out on the market with
respect to the share buyback program approved by the Shareholders’
General Meeting of April 29, 2009, in force until April 29, 2010.
Transactions made out from April 30 until December 31, 2010 within the frame of the current share buyback program
Within the frame of the new share buyback program approved by
the Shareholders’ General Meeting of April 29, 2010, 307,750 shares
were acquired directly by the Company on the market at an average
price of €42.23.
171,377 shares were assigned for the purpose of subsequent
cancellation, the balance, i.e. 136,373 shares, being assigned for
the purpose of future grant of free shares.
Number of self-held shares as on December 31, 2010
Taking into account:
p the remaining number of self-held shares as on January 1, 2010,
i.e. 250,
p the number of shares acquired directly on the market in 2010,
p the cancellation of 171,627 self-held shares on December 16,
2010,
136,373 shares with a par value of €2 and acquired on the market at
an average price of €43.54 were self-held by the Company at the end
of the year, representing 0.18% of share capital as on December 31,
2010.
It is stipulated that:
p all transactions made out in 2010 by the Company with respect to
its share buyback programs were made on a spot basis without
any open purchasing or selling position being taken;
p the Company does not use derivatives with respect to its share
buyback programs;
p the bank fees relating to the buyback transactions made directly
on the market by the Company in 2010 amounted to €12,995.
❚ RENEWAL OF THE SHARE BUYBACK PROGRAM
As the authorization granted by the Shareholders’ General Meeting
of April 29, 2010 expires on October 28, 2011, its renewal in favor
of the Board of Directors, on a similar basis, will be proposed at the
General Meeting of April 28, 2011, for a further period of 18 months,
i.e. until October 27, 2012.
The description of this new program, drawn up in accordance with the
provisions of articles 241-1 to 242-6 of AMF’s General Regulations,
will be available on the Company’s website (www.imerys.com – our
Group – Publications & Regulated Information section) and sent to
the AMF. A copy of this description can also be obtained on request
from the Company’s head office.
* All prices and amounts are given excluding fees and commissions.
6.2.5 EMPLOYEE SHAREHOLDER PLANS
As on December 31, 2010, 0.28% of capital and 0.36% of voting
rights in the Company were held, either directly or through a company
mutual fund, by Group employees under the Group Savings Plan (for
more information concerning employee shareholders, see chapter 1,
paragraph 1.9.5 of the Registration Document).
6.2.4 SHARE BUYBACK PROGRAMS
222 2010 REGISTRATION DOCUMENT IMERYS
ADDITIONAL INFORMATION 6Shareholding
6.3 | SHAREHOLDING
6.3.1 DISTRIBUTION OF SHARE CAPITAL AND VOTING RIGHTS OVER THE PAST THREE YEARS
Changes in the share capital and voting rights structure over the past three years are as follows:
As on 12/31/2008 As on 12/31/2009 As on 12/31/2010
Number of shares
held
% of share
capital
Voting rights
attached(1)
% of voting rights
Number of shares
held
% of share
capital
Votingrights
attached (1)
% of voting rights
Number of shares
held
% of share
capital
Votingrights
attached (1)
% of voting rights
Pargesa
Netherlands BV 17,196,462 27.39 34,288,174 35.35 19,702,842 26.14 36,899,304 33.64 19,348,412 25.64 36,544,874 32.56
Belgian Securities
BV 19,177,186 30.54 35,921,214 37.04 23,114,711 30.66 39,858,739 36.33 23,201,353 30.74 42,378,539 37.76
Sub-total 36,373,648 57.93 70,209,388 72.39 42,817,553 56.80 76,758,043 69.97 42,549,765 56.38 78,923,413 70.32
M&G Investment
Management Ltd. (2) 3,533,526 5.63 3,533,526 3.64 5,186,214 6.88 5,186,214 4.73 4,890,722 6.48 4,890,722 4.35
Vanguard Precious
Metals and Mining
Funds (3) 3,380,000 5.38 3,380,000 3.49 4,056,000 5.38 4,056,000 3.70 3,900,000 5.17 3,900,000 3.47
Group employees (4) 216,441 0.35 309,181 0.32 223,793 0.30 314,761 0.29 210,215 0.28 402,611 0.36
Self-held shares 250 ns - - 136,373 0.18 - -
Public 19,282,975 30.71 19,555,478 20.16 24,565,017 30.65 23,394,002 21.32 23,787,080 31.51 24,118,100 21.50
Total (5) 62,786,590 100.00 96,987,573 100.00 75,389,496 100.00 109,709,020 100.00 75,474,155 100.00 112,234,846 100.00
(1) According to article 22 of the Articles of Association, shares registered for at least two years carry a double voting right.
(2) M&G Investment Management Limited belongs to the Prudential Plc group (Great Britain).
(3) Vanguard Precious Metals and Mining Funds belongs to the Vanguard group (United States).
(4) In accordance with the provisions of article L. 225-102 of the French Code of Commerce, only shares held by Group employees under the Groups Savings Plan
appear in this table.
(5) Voting rights specified in this table are net voting rights. For information, the number of theoretical voting rights was standing at 112,372,019
on December 31, 2010.
As on December 31, 2010 the members of the Board of Directors and the Executive Management held on a personal basis 0.23% of the
Company’s share capital and 0.26% of its voting rights (for more details, see chapter 3, paragraph 3.1.2 of the Registration Document).
6.3.2 CROSSING OF THRESHOLDS
On January 27, 2010, further to a transfer of Imerys shares on the
market, Pargesa Netherlands BV had crossed down individually the
threshold of 1/3 of voting rights in the Company, the number of
shares being held by the latter at that date amounting to 19,368,012
i.e 25.68% of the share capital and 33.28% of the voting rights (AMF
decision and notice 210C0475).
The Company was not informed of any other threshold crossing
declarations in financial 2010.
As of the date of the present Registration Document and to the best
of Imerys’ knowledge, no shareholder other than those mentioned
in paragraph 6.3.1 above directly or indirectly holds more than 5%
of voting rights of the Company.
223IMERYS 2010 REGISTRATION DOCUMENT
ADDITIONAL INFORMATION
6
Shareholding
6.3.3 SHAREHOLDERS’ AGREEMENT
Because of the number of voting rights held by Pargesa Netherlands
BV and Belgian Securities BV, the Pargesa-GBL concert has
controlling rights over the Company. Nevertheless, the Company
judges that there is no risk of such control being exercised abusively.
Actually, the Company and its Board of Directors have always been
extremely attentive to the respect of all shareholders’ interests
and have always striven to comply with the best Governance rules
and practices in this field, as shown in particular by the number of
independent members of the Board of Directors and its specialized
Committees (for more information on the composition of the Board
of Directors and its Committees, see chapter 3, paragraph 3.1.2 of
the Registration Document).
As of the date of the present Registration Document, the Company
has not been informed of any agreement between the Company’s
shareholders, nor of any agreement that, if implemented, could lead
to a change of control.
6.3.4 IDENTIFICATION OF BEARER SHAREHOLDERS
In 2010, Imerys asked Euroclear France to conduct a survey
of identifiable bearer shares in the Company among financial
intermediaries with holding thresholds over 30,000 shares. Except
for the controlling shareholders (Pargesa Netherlands BV and Belgian
Securities BV), this survey identified 4,176 bearer shareholders with
over 200 shares that together represented 39.72% of share capital
as on May 31, 2010 (of which 233 professional investors holding
37.66% of share capital).
6.3.5 GROUP SHAREHOLDING STRUCTURE
The organizational chart showing relationships among Imerys shareholders with regard to share capital and voting rights as of December 31,
2010 may be presented as follows:
Public Power Corporation du Canada
Parjointco N.V.
Imerys
Pargesa Netherlands BV
GBL
Belgian Securities BV
Pargesa Holding SA
Family Desmarais
contrôle
BNP Paribas
Public
50.00%(1) (2)
14.00%(1)
19.40%(2)
31.90%(1)
17.70%(2)
contrôle
50.00%(1) (2)
50.00%(1)
52.00%(2)
43.62%(1)
29.68%(2)
30.74%(1)
37.76%(2)
(1) Percentage of share capital.(2) Percentage of voting rights.
100%(1) (2)
54.10%(1)
62.90%(2)
25.64%(1)
32.56%(2)
100%(1) (2)
Groupe Frère - Bourgeois/CNP
Family Frère
224 2010 REGISTRATION DOCUMENT IMERYS
ADDITIONAL INFORMATION 6Elements which could have an impact in the event of a takeover bid
Pargesa Holding SA is a company organized under the laws of
Switzerland with registered offices located at 11 Grand-rue, CH
1204 Geneva (Switzerland). Pargesa Netherlands BV is a company
organized under the laws of the Netherlands, with registered offices
located at Herengracht 483, 1017 BT Amsterdam (Netherlands).
Groupe Bruxelles Lambert (GBL) is a company organized under the
laws of Belgium, with registered offices located at Avenue Marnix
24, 1000 Brussels (Belgium). Belgian Securities BV is a company
organized under the laws of the Netherlands, with registered offices
located at Herengracht 555, 1017 BW Amsterdam (Netherlands).
The direct tie-up of Imerys to the Pargesa-GBL group results from
the merger of Parfinance into the Company, carried out on June 30,
1998. Parfinance was then, and had already been for several years,
the Company’s controlling shareholder.
Parjointco is a company organized under the laws of the Netherlands,
with registered offices located at 3016 DE-Rotterdam, Veerkade 5,
Netherlands. It is held equally, and jointly controlled by Power Group,
a Canadian group controlled by the family of Mr. Paul Desmarais and
by Groupe Frère/CNP (Compagnie Nationale à Portefeuille), a Belgian
group controlled by the family of Baron Albert Frère.
Following the merger of Parfinance into the Company, the Pargesa-
GBL group, then the majority shareholder of Parfinance, declared
on July 6, 1998 that, with respect to the concerted action that united
them, it exceeded the thresholds of one-third and one-half of share
capital and voting rights in the Company. “Conseil des Marchés
Financiers” (CMF) acknowledged that said thresholds were exceeded
as a result of the Company’s merger with Parfinance and granted
the Pargesa-GBL concert a dispensation from the obligation to file
a take-over bid plan, pursuant to the provisions of article 5-4-6 of its
General Rules (notice 198C0696 of July 23, 1998).
On December 20, 2006, the Pargesa-GBL group informed AMF
that, following the allocation of double voting rights to the Imerys
shares held by Belgian Securities BV resulting from their being held
in a registered account for more than two years on December 15,
2006, the Pargesa-GBL group had exceeded the threshold of 2/3
voting rights in the Company and Belgian Securities BV had directly
exceeded the threshold of 1/3 voting rights (AMF Decision and Notice
207C0012). On January 9, 2007, AMF, at the request of Belgian
Securities BV and based on article 234-9 6° of its general regulations,
granted the latter company a dispensation from the obligation to file
a take-over bid plan for the Company, as provided by article 234-2
of said regulations (AMF Decision and Notice 207C0065).
On March 21, 2011, the Pargesa-GBL group notified to AMF its
intention of reclassification of Imerys shares, according to which
Belgian Securities BV would acquire the whole of Imerys shares
held by Pargesa Netherlands BV, and as a consequence requested
to AMF an exemption from the obligation to file a take-over bid
plan for the Company’s shares. Such exemption being granted on
March 29, 2011, the share transfer should occur in April 2011. Such
transaction would entail the loss of double voting rights attached to
the Pargesa Netherlands BV’s stake and would reduce accordingly
the total number of voting rights of the Company; it would not alter
the ultimate control of the Company.
6.4 | ELEMENTS WHICH COULD HAVE AN IMPACT IN THE EVENT OF A TAKEOVER BID
Pursuant to article L. 225-100-3 of the French Code of Commerce,
elements which could have an impact in the event of a takeover bid
are as follows, being specified that no specific mechanism has been
set up by the Company:
Structure of the share capital - direct or indirect shareholdings in the Company – Shareholders’ agreements
Information regarding the shareholding of the Company (structure of
the share capital, thresholds crossings and control of the Company)
appear in section 6.3 of the present chapter.
Restrictions to the exercise of voting rights and to the transfer of shares or agreements known by the Company
None.
Holders of any securities granting specific rights of control
Company’s Articles of Association provide for that shares registered
in the name of the same shareholder for at least two years carry a
double voting right (see section 6.1 of the present chapter).
Mechanisms of control existing in employee shareholding schemes
None.
Specific rules governing the appointment or replacement of Directors and the modification of the Company’s by-laws
None.
225IMERYS 2010 REGISTRATION DOCUMENT
ADDITIONAL INFORMATION
6
Imerys stock exchange information
Powers of the Board of Directors regarding issue of shares or share buyback
Terms and conditions of the Company’s share buyback are set forth
in paragraphs 6.2.3 and 6.2.4 of the present chapter.
Agreements that may be amended or terminated in case of a change of control of the Company
Some of the main f inancing agreements of the Company
(see note 25.5 to the consolidated financial statements) contain a
clause which provides for their early reimbursement, under certain
conditions and on the Company’s initiative, in case of a change of
control.
Joint venture agreements concluded by the Company’s subsidiaries
include generally an exit clause in case of a change of control of the
said subsidiaries.
Agreements providing indemnities to members of the Board of Directors or employees if they resigned or are dismissed without true and serious reason or if their job ends due to a takeover bid
Terms and conditions of the indemnity that may be owed to executive
corporate officers in case of end of their duties are detailed in
chapter 3, paragraph 3.3.2 of the Registration Document.
6.5 | IMERYS STOCK EXCHANGE INFORMATION
Imerys shares are listed on the Euronext Paris and are eligible for
the deferred settlement system (“Système à Règlement Différé” -
SRD) (ISIN FR code 0000120859-Mnemo NK). Imerys is part of
the new index CAC MD (mid 60) within SBF 120 which represents
the 120 biggest stocks listed on Eurnoext Paris (in terms of float
and capital flow). The Imerys share is also part of “Dow Jones Euro
Stoxx 600”, the benchmark index for the euro zone, made up of
360 selected shares from the 11 countries in the zone. Within these
indexes (SBF 120 and Dow Jones Euro Stoxx 600), Imerys shares
belong to the general mining sector (“1775 General Mining Activities”
according to classification ICB).
Imerys shares are also included in the “FTSE4Good,”and “ASPI
Eurozone® (*)” indexes that identify companies that are globally
acknowledged for their good corporate citizenship in terms of
Sustainable Development (respect for human rights and the
environment, development of relationships with shareholders). Imerys
is also part of Ethibel’s “Excellence” investment register.
No shares in an Imerys subsidiary are traded on any stock exchange.
(*) Advanced Sustainable Performance Indices – Index managed by the ranking agency Vigeo.(*) Advanced Sustainable Performance Indices – Index managed by the ranking agency Vigeo.
6.5.1 HIGHEST AND LOWEST MARKET PRICES FROM 2006 TO 2010 (1)
YearHighest market price (2)
(€)
Lowest market price (2)
(€)
Last closing market price of the year
2006 67.28 49.99 62.51
2007 72.61 48.83 52.16
2008 55.36 23.44 30.14
2009 44.35 21.58 42.01
2010 51.00 36.75 49.89
(1) Prices given for the years 2006 to 2008 have been restated in line with the adjustment arising from the share capital increase of June 2, 2009.
(2) Market prices observed during trading.
(Source: Bloomberg)
226 2010 REGISTRATION DOCUMENT IMERYS
ADDITIONAL INFORMATION 6Imerys stock exchange information
6.5.2 TRADES SINCE JANUARY 2009
Highest price*
(€)
Lowest price* (€)
Total monthly trading volume Average daily trading
Number of shares
Capital (M€)
Number of shares
Capital (M€)
Number of trades
2009
January 33.39 25.09 2,976,897 93,37 141,757 4.45 1,048
February 32.74 23.39 2,997,167 90,64 149,858 4.53 1,162
March 27.63 21.58 3,631,841 94,81 165,084 4.31 1,232
April 30.41 24.67 3,742,832 112,48 187,142 5.62 1,540
May 37.19 29.31 4,454,041 145,04 222,702 7.25 1,754
June 34.20 28.05 3,428,402 105,61 155,836 4,80 1,346
July 38.75 26.80 7,290,856 222,23 316,994 9.66 1,194
August 38.40 34.55 1,988,543 73,05 94,693 3.48 985
September 44.35 35.54 3,498,461 138,89 159,021 6.31 1,508
October 42.30 35.51 2,469,161 98,18 112,235 4.46 1,106
November 41.20 36.89 2,096,655 83,25 99,841 3.96 1,024
December 42.40 38.32 1,723,230 68,91 78,329 3.13 707
Total 2009 40,298,086 1,326.46
2010
January 43.32 39.46 2,702,488 110.51 135,124 5.53 1,215
February 41.27 36.75 2,190,167 84.78 109,508 4.24 1,075
March 45.64 37.93 2,563,377 109.16 111,451 4.75 1,195
April 48.95 44.54 2,526,422 117.33 126,321 5.87 1,478
May 46.50 39.23 3,709,598 162.17 176,648 7.72 1,495
June 47.10 39.24 2,553,164 109.21 116,053 4.96 1,234
July 46.50 40.32 1,994,940 86.88 90,679 3.95 1,019
August 46.12 38.00 1,465,580 61.33 66,617 2.79 744
September 44.74 39.11 1,840,213 77.82 83,646 3.54 852
October 45.35 42.88 1,989,490 88.12 94,738 4.20 1,181
November 48.00 43.05 1,905,634 87.09 86,620 3.96 1,164
December 51.00 44.21 1,372,283 67.48 59,664 2.93 802
Total 2010 26,813,356 1,161.88
* Market prices observed during trading.
(Source: Euronext)
227IMERYS 2010 REGISTRATION DOCUMENT
ADDITIONAL INFORMATION
6
Dividends
6.6 | PARENT COMPANY/SUBSIDIARIES ORGANIZATION
As on December 31, 2010, the Group was made up of 298 companies
in 48 countries (main consolidated entities of the Group are listed
in note 5.2 to the consolidated financial statements). The Group
operational structure is based on four business groups which are
detailed in chapter 1, paragraph 1.2.4 of the Registration Document.
Imerys is the Group’s holding company. In that respect it does
not directly carry out any industrial or commercial activity. The
Company’s assets are mainly comprised of the investments it directly
holds in some Group subsidiaries. For more information concerning
the subsidiaries held directly by the Company, see the company
financial statements in chapter 5 of the Registration Document.
Imerys as well as some of its local holding companies (Belgium,
Brazil, China, Singapore, United Kingdom, United States), provide
all its subsidiaries with general assistance and with expertise in
the following areas: Purchasing; Insurance; Audit; Communication;
Accounting & Financial Control; Environment, Health & Safety; Tax;
Information Technology; Innovation; Legal; Intellectual Property;
Research & Development; Human Resources; Strategy; Treasury.
These services include, in particular: assistance and advice in
response to case-by-case requests from its subsidiaries, as well
as more general studies and analyses and recommendations or
proposals on preventive actions.
Compensation for these services is determined on the basis of the
related costs incurred by Imerys and its local holding companies.
These costs are allocated among the subsidiaries that benefit from
the services, either in proportion to their sales in relation to the total
sales of the division they belong to or in proportion to the number
of their employees. In addition, external costs incurred specifically
on behalf of a subsidiary and the costs of employees seconded to a
subsidiary are allocated separately to that subsidiary.
The Company invoiced a net total amount of €16.86 million in financial
2010 with respect to services provided to its subsidiaries.
Imerys is also the lead company of the tax consolidation group for the
Group’s French companies, the share capital of which is more than
95% held by Imerys (see note 8 to the statutory financial statements).
6.7 | DIVIDENDS
Imerys’ policy with regard to distribution of dividends is based on earnings recorded for the considered financial year.
In accordance with the provisions of Article 243 bis of the French General Tax Code:
p the dividends distributed with respect to the last three financials were as follows:
Financial 2009 Financial 2008 Financial 2007
Net income per share, Group share €1.66 €3.96 * €4.65 *
Net dividend per share €1.00 €1.00 €1.90
Gross dividend per share €1.00 €1.00 €1.90
Number of shares compensated 75,505,458 62,787,810 62,618,358
Total net distribution €75,5 M €62.8 M €118.9 M
* Amounts given for 2007 and 2008 have been restated in line with the adjustment arising from the share capital increase of June 2, 2009.
p in accordance with article 158-3-2° of the French General Tax
Code, the entire paid-up dividend is subject to income tax under
the gradual scale and is eligible for the 40% discount from which
private individuals domiciled in France for tax purposes may
qualify, as well as the flat annual abatement. However, pursuant
to article 117 quarter of the French General Tax Code, private
individuals domiciled in France for tax purposes may, prior to the
dividend payment date, opt for liability to the 19% withholding.
Imerys does not usually make interim distributions. Dividends are
paid once a year following the Shareholders’ General Meeting called
upon to approve the management and financial statements for the
financial year just ended.
The right to claim dividends lapses five years from the date of
payment. Unpaid amounts are deposited with the French State in
the first 20 days of January of the year following that lapse.
228 2010 REGISTRATION DOCUMENT IMERYS
ADDITIONAL INFORMATION 6Shareholder relations
6.8 | SHAREHOLDER RELATIONS
Imerys seeks to establish a relationship of trust and openness with
its shareholders and has created several communication tools for
informing them about the Group’s business, strategy, earnings and
outlook:
p an annual Registration Document (Document de Référence)
registered with AMF including the Financial Annual report of the
considered financial year;
p a corporate brochure, published at the same time as the
Registration Document giving the key facts about the Group’s
business, development during the financial year and financial
results;
p a half-yearly Financial Report on the financial statements to
June 30;
p a Letter to Shareholders reviewing the Group’s news and financial
performance;
p a Sustainable Development Report, published every two years,
that gives shareholders additional information on non-financial
items.
All these documents are published in English and French and are
sent regularly to every registered shareholder and to the bearer
shareholders who so request.
The financial community and individual shareholders are also
informed on the Company’s business through financial notices in the
press each time results are published (newspapers and Company’s
Internet website), including quarterly figures, and when annual
Shareholders’ General Meetings are convened.
Meetings and conference calls are held on a regular basis in
the leading financial markets with financial analysts, financial
intermediaries and institutional investors. Individual or gathered
meetings are also organized with investors in France, the United
Kingdom and the United States as well as in Canada, Germany, Italy,
Switzerland and Scandinavia. In 2010, more than 350 meetings and
interviews were organized with investors and analysts. Last, Imerys
attends regularly thematic conferences organized by stockbrokers.
The website www.imerys.com includes a specific section for
individual shareholders; it also presents the Group’s activities and
enables users to follow results presentation meetings and the annual
Shareholders’ General Meeting live. The online financial library groups
together the documents that provide regulated information and all the
Group’s publications (results’ presentations, press releases, annual
brochures and Registration Documents, semi-annual reports, letters
to shareholders and Sustainable Development reports).
Imerys also provides its registered shareholders with an online service
for consulting their securities account through the secure Internet site
www.olisnet.com/actionnaires. This site gives shareholders access to
the value of their securities account, their latest security movements,
the availability of their securities, their voting rights as well as the
prices and characteristics of the securities in their portfolio. It also
enables them to obtain all documentation concerning the Company’s
annual Shareholders’ General Meetings and to vote on line.
Financial Communication belongs to the Group Finance Function:
p Telephone: + 33 (0) 1 49 55 66 55
p Fax: + 33 (0) 1 49 55 63 98
p e-mail: [email protected]
Imerys shares are serviced by the following bank:
CACEIS Corporate Trust
14. rue Rouget de Lisle
92862 Issy les Moulineaux Cedex 9
p Telephone: + 33 (0) 1 57 78 34 44
p Fax: + 33 (0) 1 49 08 05 80
p e-mail: [email protected]
CACEIS Corporate Trust is more specifically at the service of
registered shareholders for the management of their Imerys shares.
77.1 PRESENTATION OF THE RESOLUTIONS BY THE BOARD OF DIRECTORS 230
7.1.1 Financial year 2010 - annual fi nancial statements and allocation of earnings 230
7.1.2 Regulated agreements and commitments 231
7.1.3 Composition of the Board of Directors 231
7.1.4 Share buyback program and self-held share cancellation 232
7.1.5 Financial authorizations 233
7.1.6 Specifi c authorizations granted in favor of employees and/or corporate offi cers of the Group 235
7.2 AUDITORS’ REPORTS 2367.2.1 Statutory auditors’ report on the issue of shares and/or marketable securities with retention
and/or waiver of preferential subscription rights 236
7.2.2 Statutory auditors’ report on the issue of marketable securities conferring entitlement
to the grant of debt securities 238
7.2.3 Statutory auditors’ report on the issue of shares or marketable securities with waiver
of preferential subscription rights reserved for members of a company savings plan 239
7.2.4 Statutory auditors’ special report on the granting of share subscription or purchase options
to employees and corporate offi cers 240
7.2.5 Statutory auditors’ special report on the free grant of existing shares or shares to be issued
to employees and corporate offi cers 241
7.2.6 Statutory auditors’ report on the issue of share subscription or purchase warrants
with waiver of preferential subscription rights 242
7.2.7 Statutory auditors’ report on the decrease in share capital by cancellation of purchased shares 243
7.3 AGENDA 244
7.4 DRAFT RESOLUTIONS 245
ORDINARY AND EXTRAORDINARY SHAREHOLDERS’ GENERAL MEETING OF APRIL 28, 2011
230 2010 REGISTRATION DOCUMENT IMERYS
ORDINARY AND EXTRAORDINARY SHAREHOLDERS’ GENERAL MEETING OF APRIL 28, 20117Presentation of the resolutions by the Board of Directors
7.1 | PRESENTATION OF THE RESOLUTIONS BY THE BOARD OF DIRECTORS
The resolutions that the Board of Directors drew up at its February 15,
2011 meeting and asks you to adopt, fall within the scope of the
Ordinary part of the Shareholders’ General Meeting for resolutions
1 to 12, 13 and 26 and within the scope of the Extraordinary part for
resolutions 13 to 18 and 20 to 25.
7.1.1 FINANCIAL YEAR 2010 - ANNUAL FINANCIAL STATEMENTS AND ALLOCATION OF EARNINGS
(Three resolutions within the scope of the Ordinary Shareholders’ General Meeting)
We first submit to your approval the Company’s financial statements
(first resolution) and the Group’s consolidated financial statements
(second resolution) for financial year 2010.
The presentation of these financial statements and the description
of the financial situation, business and results of the Group and the
Company for the financial year just ended, as well as the various items
of information required by current legal and regulatory provisions,
appear in chapters 2 and 5 of the Registration Document.
You are then called upon to decide on the allocation of the Company’s
earnings for financial year 2010 (third resolution).
The Company’s net income for the past financial year amounts to
€83,645,325 on which we propose you to withdraw an amount of
€16,932 in order to raise the legal reserve to 10% of the Company’s
share capital. The balance, increased by the retained earnings
appearing in the balance sheet of €369,029,828 forms a total
distributable amount of €452,658,221.
We propose you to allocate an amount of €90,568,986 to the
payment of a dividend of €1.20 per share for the 75,474,155 shares
that make up the share capital as on January 1, 2011 (see chapter 6,
paragraph 6.2.1 of the Registration Document); the remainder would
be allocated to the “Retained earnings” account. The total amount
of dividend paid out would be adjusted according to the number of
shares that would be issued following the exercise of stock options
and which would be entitled to the dividend with respect to financial
2010 as on the date of payment of that dividend. Consequently, the
amount allocated to retained earnings would be determined on the
basis of the total amount of dividend effectively paid out. Finally, if the
Company were to be holding some of its own shares on the date of
payment of the dividend, the sums corresponding to the dividends
that would be not paid out as a result would be allocated to retained
earnings. The dividend would be paid as from May 11, 2011.
In accordance with article 243 bis of the French General Tax Code,
you are reminded that the entire proposed dividend with respect to
2010 is eligible for the 40% allowance provided for by article 158-3-
2° of the French General Tax Code, from which private individuals
domiciled in France for tax purposes may benefit. However, in
accordance with article 117 quater of the French General Tax Code,
private individuals domiciled in France for tax purposes may, prior to
the dividend payment date, opt for liability to the 19% withholding.
We also remind you that the dividends paid out with respect to the previous three financial years were as follows:
As on: 12/31/2009 12/31/2008 12/31/2007
Net dividend per share €1.00* €1.00* €1.90*
Number of shares compensated 75,505,458 62,787,810 62,618,358
(*) dividend eligible for the 40% allowance.
With a net amount of €1.20 euro per share, the proposed dividend for this year represents a 20% increase compared with the dividend paid
with respect to the previous financial year.
231IMERYS 2010 REGISTRATION DOCUMENT
ORDINARY AND EXTRAORDINARY SHAREHOLDERS’ GENERAL MEETING OF APRIL 28, 2011
7
Presentation of the resolutions by the Board of Directors
7.1.2 REGULATED AGREEMENTS AND COMMITMENTS
(One resolution within the scope of the Ordinary Shareholders’ General Meeting)
Pursuant to the provisions of articles L.225-38, L.225-40 et
L.25-42-1 of the French Code of Commerce, we ask you to rule
upon the Statutory Auditors’ special report relating to the regulated
agreements and commitments concluded by the Company during
financial 2010 and we submit to your approval the said regulated
agreements and commitments (fourth resolution).
In fact, in accordance with the authorization given by the Board
of Directors at its meeting of November 3, 2010, M. Gilles Michel
benefits from:
p the collective supplementary pension plan with defined benefits
as well as the amendments made to this plan;
p the collective supplementary pension plan with defined
contribution set up by the Company in 2009;
p the social guarantee for company managers and executives
(GSC);
p an end of contract indemnity that would be owed to Mr. Gilles
Michel in the event that his corporate office is terminated at the
Company’s initiative or in the event of forced departure linked to a
change of control or strategy of the Company, being precised that
the granting of such indemnity would be subject to performance
conditions.
These regulated agreements and commitments are detailed in the
Statutory Auditors’ special report which is reproduced in chapter
2, paragraph 2.2.3 of the Registration Document. Agreements and
commitments authorized and concluded during previous financial
years and which have continued in 2010, are also mentioned in such
report.
7.1.3 COMPOSITION OF THE BOARD OF DIRECTORS
(Seven resolutions within the scope of the Ordinary Shareholders’ General Meeting)
A second set of resolutions concerns the composition of the Board
of Directors. The term of office of the Directors is three years.
It is reminded that at its meeting on November 3, 2010, the Board of
Directors appointed Mr. Gilles Michel as a new Director in succession
to Mr. Gilbert Milan for the remaining term of his office, i.e. until
the Shareholders’ General Meeting that will be called in 2012 to
rule on the management and financial statements for financial 2011.
According to the law, you are asked to ratify this appointment (fifth
resolution).
Moreover, the terms of office of Mr. Aimery Langlois-Meurinne,
Mr. Gérard Buffière, Mr. Aldo Cardoso, Mr. Maximilien de Limburg
Stirum and Mr. Jacques Veyrat will expire at the end of the present
Meeting.
In accordance with the recommendations of the Appointments and
Compensation Committee, you are asked to renew these terms of
office for a further three years, i.e. until the Shareholders’ General
Meeting that will be called in 2014 to rule on the management and
financial statements for financial 2013 (sixth to tenth resolutions).
Professional information regarding the Directors whose ratification
or renewal of term of office is proposed, are included in chapter 3,
paragraph 3.1.3 of the Registration Document.
Last, following the recommendations of the Appointments and
Compensation Committee, you are also asked to rule on the
appointment of Mrs. Arielle Malard de Rothschild as a new Director
of the Company for the same statutory duration of three years, i.e.
until the Shareholders’ General Meeting that will be called in 2014 to
rule on the management and financial statements for financial 2013
(eleventh resolution).
Professional information regarding Mrs. Arielle Malard de Rothschild:
A doctor of Economics of the Institut d’Etudes Politiques of Paris,
Arielle Malard de Rothschild (47 years) began her career at Lazard
bank where she spent 10 years, first within the Department Advice
to foreign governments department, and then in the Mergers
& Acquisitions Department. Arielle Malard de Rothschild joined
Rothschild & Cie banque in 1999 where she set up the Emerging
Markets department in Paris that she developed; she is currently
Managing Director and Vice-President for Eastern Europe at
Rothschild & Cie banque. Arielle Malard de Rothschild is also a
director of Groupe Lucien Barrière.
In 1997, she was appointed as director of the NGO Care France and
Chairman in 2007; she is also a director of CARE International (USA),
the Rothschild Foundation and Traditions pour Demain (France).
In accordance with the principles used by the Company to determine
the independent status of its Directors, after examining their
personal situation, the Appointments and Compensation Committee
recognized that status to Mr. Cardoso and Mr. Veyrat as well as to
Mrs. Malard de Rothschild. However, independent status was not
awarded to Mr. Langlois-Meurinne and Mr. de Limburg Stirum who
represent the Company’s controlling shareholders, or to Mr. Buffière,
Chief Executive Officer.
232 2010 REGISTRATION DOCUMENT IMERYS
ORDINARY AND EXTRAORDINARY SHAREHOLDERS’ GENERAL MEETING OF APRIL 28, 20117Presentation of the resolutions by the Board of Directors
Following the Shareholders’ General Meeting of April 28, 2011 and subject to its approval of the propositions above, the Board of Directors
will be made up as follows:
Year of end of term of office Name Independent member
2012 Jacques DRIJARD No
Jocelyn LEFEBVRE No
Gilles MICHEL No
Eric Le MOYNE de SERIGNY No
2013 Jean MONVILLE Yes
Ian GALLIENNE No
Fatine LAYT Yes
Robert PEUGEOT Yes
Olivier PIROTTE No
Amaury de SEZE No
Pierre-Jean SIVIGNON Yes
2014 Aimery LANGLOIS-MEURINNE No
Gérard BUFFIERE No
Aldo CARDOSO Yes
Maximilien de LIMBURG STIRUM No
Arielle MALARD de ROTHSCHILD Yes
Jacques VEYRAT Yes
7.1.4 SHARE BUYBACK PROGRAM AND SELF-HELD SHARE CANCELLATION
(Two resolutions, one within the scope of the Ordinary Shareholders’ General Meeting and the other of the Extraordinary Shareholders’ General Meeting)
❚ SHARE BUYBACK PROGRAM
The authorization to buy back the Company’s shares on the
market, given to the Board of Directors for a period of 18 months
by the Ordinary and Extraordinary Shareholders’ General Meeting
of April 29, 2010, expires before the 2012 Shareholders’ General
Meeting; thus, you are asked to renew it now in accordance with
the provisions of articles L. 225-209 et seq. of the French Code of
Commerce and articles 241-1 to 241-6 of the General Regulations
of AMF (twelfth resolution). For further information concerning the
Company’s implementation in 2010 of its share buyback programs,
see chapter 6, paragraph 6.2.4. of the Registration Document.
You are reminded that the requested new authorization is intended
to enable the Company to make purchases of its own shares:
p for the purpose of the subsequent cancellation of the shares
acquired by reducing the Company’s capital, in particular in order
to offset the dilution impact on the shareholders likely to result
from the grant of stock options and/or free shares;
p in order to ensure the liquidity of the market through an investment
services firm acting in the name and on behalf of the Company,
under a liquidity contract in accordance with a code of conduct
recognized by AMF;
p with respect to employees’ participation in shareholding plans
set up by the Company or for the purposes of delivery to certain
employees and corporate officers of the Group of the shares
resulting from the exercise of stock purchase options or free
shares allotment;
p for the delivery or exchange of shares, in particular with respect to
issue of shares or securities giving access immediately or in the
future to capital, or within the frame of external growth operations;
p and in general, for any purposes that are permitted or may come
to be authorized by current regulations.
The maximum number of shares that may be purchased under
this new authorization shall not exceed 10% of the total number of
shares issued and outstanding as of January 1, 2011, that is 7,547,415
shares. The number of shares that may be held, whether directly or
indirectly and at any time whatsoever, shall not exceed 10% of the
shares making up the capital. Last, the maximum purchase price
would be set at €80 per share, representing a maximum amount of
investment of €603.8 million.
The description of this new program, drawn up in accordance with the
provisions of articles 241-1 to 242-6 of AMF’s General Regulations,
will be available on the Company’s website (www.imerys.com – our
Group – Publications & Regulated Information section) prior to the
Shareholders’’ General Meeting of April 28, 2011. A copy of this
description can also be obtained on request from the Company’s
head office.
233IMERYS 2010 REGISTRATION DOCUMENT
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7
Presentation of the resolutions by the Board of Directors
❚ CANCELLATION OF SELF-HELD SHARES
You are also proposed to renew the authorization granted to the
Board of Directors for the purposes of canceling all or part of the
shares self-held by the Company under its share buyback programs,
within the limit of 10% of its capital per 24-month period, by reducing
its share capital accordingly and allocating the difference between
the purchase value of the cancelled shares and their par value to
available premiums and reserves (twenty-fifth resolution).
7.1.5 FINANCIAL AUTHORIZATIONS
(Eight resolutions, one within the scope of the Ordinary Shareholders’ General Meeting and the seven others of the Extraordinary Shareholders’ General Meeting)
The Board of Directors has at its disposal a set of financial
authorizations, renewed lastly by the Shareholders’ General Meeting
of April 29, 2009, that allow to increase the net equity of the Company
through the issue of shares or any securities that represent a debt or
give access, immediately or in the future, to shares in the Company
with or without preemptive subscription right, or by incorporation
of reserves, premiums, income or other items (An overview of the
financial authorizations and delegations is set out in chapter 6,
paragraph 6.2.3 of the Registration Document).
These financial authorizations were designed to give the Board of
Directors the greatest leeway and flexibility in choosing the issue
arrangements that are most favorable to the Company and its
shareholders and the most appropriate to the market fluctuation
and financial context of the time.
It is reminded that on April 29, 2009 the Board of Directors used
the delegation of authority granted by the Shareholders’ General
Meeting held on the same day, in order to carry out a share capital
increase of a nominal amount of approx. €12.6 million through the
issue of common shares, with Shareholders’ preemptive subscription
right (for more details regarding the conditions of this share capital
increase, see chapter 6, paragraph 6.2.3 of the Registration
Document).
The financial authorizations and delegations granted to the Board
of Directors by the Shareholders’ General Meeting of April 30, 2009
expiring in 2011, you are asked to renew them under the conditions
described as follows:
❚ ISSUE OF COMMON SHARES OR SECURITIES GIVING ACCESS TO CAPITAL WITH OR WITHOUT PREEMPTIVE SUBSCRIPTION RIGHTS
Issues of common shares or other securities may, at the choice of
the Board of Directors, be made with preemptive subscription right
for an unchanged global nominal amount of €80 million (thirteenth
resolution), or without such right (fourteenth resolution). In order to
take into account the best market practices, the Board of Directors
proposes that the global nominal amount of the share capital
increases that may be made without preemptive subscription right,
currently set at €50 million, be reduced to €37 million, i.e. approx.
25% of the Company’s share capital as of December 31, 2010.
The cancellation of the preemptive subscription right would allow
to call upon a greater number of investors, on both the French
and international markets, and to make the issue process easier,
particularly because of the shorter implementation period. The Board
of Directors may, whatever the case, grant shareholders subscription
priority for the period and according to the mechanism that it would
decide in accordance with the applicable law.
Within the framework of the thirteenth and fourteenth resolutions,
it is also proposed that, in case of excess demand, the Board of
Directors be authorized to increase the number of securities planned
in the initial issue in the conditions set down by legal and regulatory
provisions in force at the time of issue.
Furthermore, it is specified that, with respect to the delegation of
authority provided in order to increase the share capital without
preemptive subscription right, common shares may be issued in
compensation for securities that may be contributed to the Company
under a public exchange offer for securities in the conditions set by
article L. 225-148 of the French Code of Commerce.
❚ SHARE CAPITAL INCREASES UNDER AN OFFERING BY PRIVATE INVESTMENT
Moreover and according to the opportunity given by the French Order
no. 2009-80 of January 22, 2009, it is also proposed to complete
the current scale of delegations of authority granted to the Board of
Directors and to authorize it to carry out capital increases through
issuance of shares or securities giving access to the Company’s
share capital, by private investment (fifteenth resolution). These share
capital increases would be carried out with cancellation of preemptive
subscription rights in favor of qualified investors or a limited circle of
investors as defined in article L. 411-2 of the French Monetary and
Financial Code. The annual global ceiling of such capital increases
would be set at 20% of the share capital according to the applicable
law. It is specified that the nominal amount of the securities to be
issued pursuant to this delegation would be charged to the nominal
amount of €37 million set for the share capital increases that may be
carried out with cancellation of preemptive subscription rights. Last,
the subscription price of the shares that may be issued pursuant
to this delegation, shall be set in accordance with the provisions of
234 2010 REGISTRATION DOCUMENT IMERYS
ORDINARY AND EXTRAORDINARY SHAREHOLDERS’ GENERAL MEETING OF APRIL 28, 20117Presentation of the resolutions by the Board of Directors
article R. 225-119 of the French Code of Commerce: it shall thus
be at least equal to the weighted average price of the three most
recent trading sessions preceding the determination of such price,
potentially reduced by a maximum discount of 5%.
❚ SETTING OF THE ISSUE PRICE
Moreover, you are asked under the sixteenth resolution to authorize
the Board of Directors, in the event of issue of shares and/or securities
giving access to capital without preemptive subscription right, to
derogate, within the annual limit of 10 % of the Company’s capital,
from their price-setting conditions and to fix such price as follows:
p the issue price of the shares should be at least equal to the closing
price for Imerys shares on the stock market the day before the
issue, minus a possible 10% discount; and
p the issue price of the securities giving access to capital shall be
such that the sum immediately received by the Company plus,
as the case may be, any sum that may be received later by the
Company, is, for every ordinary share issued as a result of the
issue of those securities, at least equal to the issue price of the
shares above-mentioned.
This possibility, provided by the provisions of article L. 225-136,
1° 2 of the French Code Commerce would enable the Company
to carry out capital increases in the event of a downward trend in
Imerys share price, which might not be possible under the fourteenth
resolution.
❚ SHARE CAPITAL INCREASES IN ORDER TO COMPENSATE CONTRIBUTIONS IN KIND
You are also called on to authorize the Board of Directors to carry
out one or more share capital increases in compensation for
contributions in kind made to the Company outside any public
exchange offer and comprised of securities representing shares in
or giving access to capital of another company, within the limit of 10%
of share capital and upon presentation of a report issued by one ore
more independent auditor(s) (seventeenth resolution).
❚ ISSUE OF SECURITIES GIVING ENTITLEMENT TO AN ALLOTMENT OF DEBT INSTRUMENTS
Moreover, you are asked to grant the Board of Directors the
authority to issue securities giving entitlement to an allotment of debt
instruments (compound securities comprised of a primary security
and a secondary security) for a maximum amount of €1 billion
(eighteenth resolution).
❚ SHARE CAPITAL INCREASES BY INCORPORATION OF PREMIUMS, RESERVES OR OTHER ITEMS
The nineteenth resolution provides for the possibility of increasing the
share capital by incorporation of premiums, reserves, income or any
other amounts that could be capitalized, within the limit of the global
nominal amount provided by the thirteenth resolution, i.e. €80 million.
❚ CEILINGS OF ISSUES
The overall nominal amount of shares that may be issued without
preemptive subscription rights under the fifteenth, sixteenth and
seventeenth resolutions shall be charged to the limit of €37 million
set in the fourteenth resolution.
The overall amount of the increases in share capital of the Company
that could result from the use of the delegations and authorizations
granted by the thirteenth, fourteenth, fifteenth, seventeenth and
nineteenth resolutions would be set at €80 million, i.e. 53% of the
share capital as of December 31, 2010. The additional amount of any
shares to be issued to maintain, in accordance with the law and with
any contractual terms providing for other cases of adjustment, the
rights of the holders of securities or rights giving access to capital
that exist on the issue date, as the case may be, shall be added to
that amount. The maximum nominal amount of the debt securities
that may be issued pursuant to the authorizations relating to the
issue of securities giving access to capital, immediately or in the
future, or entitlement to an allotment of debt instruments granted
by the thirteenth, fourteenth, fifteenth, seventeenth and eighteenth
resolutions would be set at €1 billion (twentieth resolution).
These authorizations and delegations would be granted for a period of 26 months and would replace the authorizations previously granted by
the Ordinary and Extraordinary Shareholders’ General Meeting of April 29, 2009, which would thus be rendered null and void.
235IMERYS 2010 REGISTRATION DOCUMENT
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Presentation of the resolutions by the Board of Directors
❚ SHARE CAPITAL INCREASES RESERVED TO EMPLOYEES THAT JOINED A COMPANY OR GROUP SAVINGS PLAN
You are asked to renew, for a further period of 26 months, the
delegation of authority granted to the Board of Directors by the
Shareholders’ General Meeting of April 29, 2009 in order to carry out
capital increases reserved for employees and/or corporate officers
that have joined a company or Group savings plan (twenty-first
resolution). Subject to your approval, this delegation shall replace
the previous one which shall thus be rendered null and void.
The conditions of the existing authorization would remain unchanged:
cancellation of the preemptive subscription right in favor of the
beneficiaries, price of the shares to be issued at least equal to 80%
of the average stock market price for Imerys shares the day before
the issue in accordance with the law and nominal maximum increase
in share capital set at €1.6 million. It is specified that this ceiling
would be autonomous and separate from the overall capital increases
ceiling set by the twentieth resolution.
❚ SHARE SUBSCRIPTION OR PURCHASE OPTIONS AND ALLOTMENT OF FREE SHARES OF THE COMPANY
You are also proposed to renew the authorizations given to the Board
of Directors by the Shareholders’ General Meeting of April 30, 2008
to grant purchase or subscription options on the Company’s shares
(twenty-second resolution) or free shares (twenty-third resolution) to
Group’s employees and/or corporate officers, or to certain categories
of them (details regarding granting of options or free shares decided
by the Board of Directors under the existing authorizations are set
out in chapter 6, paragraph 6.2.3 and chapter 3, sections 3.4 and
3.5 of the Registration Document).
Terms and conditions of grants provided for by the new authorizations
you are asked to adopt, would be similar to the current ones.
Nevertheless, it is proposed that:
p in the event of stock subscription options, the subscription price
shall be equal to 100% of the average of the first price listed for
the share on the twenty stock market trading days preceding
the grant date, thus excluding any possibility for the Board to
apply a discount;
p in the event of stock purchase options, the purchase price of the
shares shall be equal to 100% of the average purchase price of
the shares held by the Company with respect to articles L. 225-
208 and L. 225-209 of the French Code of Commerce, also
excluding any possibility for the Board to apply a discount;
p grants of stock subscription or purchase options to executive
corporate officers or acquisition by them of free shares shall
be necessarily subject to the achievement of one or more
performance criteria determined by the Board of Directors.
Furthermore, regarding allotment of free shares, the minimum vesting
period as well as the minimum holding period for that shares would
be those provided by the regulations in force on the day of their grant.
Last, the total number of shares that may be the subject of share
subscription or acquisition options or free grants could not exceed
an overall ceiling of 5% of the Company’s capital on the day of
the Board’s granting decision, this ceiling being common to share
subscription and/or acquisition warrants that my be issued.
These authorizations would be granted for a period of 38 months
as from the date of the Shareholders’ General Meeting and shall
replace the previous ones which shall thus be rendered null and
void for the unused part.
❚ SHARE SUBSCRIPTION AND/OR ACQUISTION WARRANTS
It is reminded that the Shareholders’ General Meeting of April 29,
2010 delegated its authority to the Board of Directors, for a period
of 14 months, to increase the share capital by issue of share
subscription and/or acquisition warrants (“BSA”), whether or not
redeemable, reserved for the employees and corporate officers of the
Company and/or its subsidiaries, or for specific categories thereof,
without shareholders’ preemptive subscription right.
This delegation expiring on June 28, 2011, you are asked to renew
it according to similar conditions: the issue price of the BSA would
be set by the Board of Directors in accordance with regulations in
force on the day of issue; the subscription for the shares to which
the warrants would give the right would be equal to the average
closing price for shares in the Company for the twenty stock market
trading days prior to the day of the decision to issue the warrants
(twenty-fourth resolution).
It is specified that the total nominal amount of the share capital
increases that may be made pursuant to this delegation could not
exceed 5% of the Company’s capital on the day of issue, this ceiling
being common to the one provided for in the twenty-second and
twenty-third resolutions proposed to the Shareholders’ General
Meeting.
This new delegation would be granted for a period of 26 months as
from the date of the Shareholders’ General Meeting and shall replace
the previous one which shall thus be rendered null and void.
7.1.6 SPECIFIC AUTHORIZATIONS GRANTED IN FAVOR OF EMPLOYEES AND/OR CORPORATE OFFICERS OF THE GROUP
(Four resolutions within the scope of the Extraordinary Shareholders’ General Meeting)
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7.2 | AUDITORS’ REPORTS
ERNST & YOUNG et Autres
41, rue Ybry
92576 Neuilly-sur-Seine Cedex
S.A.S. with variable capital
Statutory Auditor
Member of the Compagnie régionale de Versailles
Deloitte & Associés
185, avenue Charles-de-Gaulle
92524 Neuilly-sur-Seine Cedex
S.A. with share capital of €1,723,040
Statutory Auditor
Member of the Compagnie régionale de Versailles
7.2.1 STATUTORY AUDITORS’ REPORT ON THE ISSUE OF SHARES AND/OR MARKETABLE SECURITIES WITH RETENTION AND/OR WAIVER OF PREFERENTIAL SUBSCRIPTION RIGHTS
Extraordinary Shareholders’ Meeting of April 28, 2011
13th, 14th, 15th, 16th and 17th resolutions
(This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of English speaking readers.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France).
To the Shareholders,
In our capacity as Statutory Auditors of your Company and pursuant to the procedures set forth in the French Company Law (Code de
commerce), and in particular, Articles L.225-135, L.225-136 and L.228-92, we hereby present to you our report on the proposed delegations
of authority to the Board of Directors to carry out various issues of shares and/or marketable securities. Shareholders are being asked to vote
on these transactions.
Your Board of Directors proposes, based on its report:
p that you delegate to it, for a period of 26 months, the authority to decide on the following transactions and to set the final terms and conditions
of these issues and proposes that, when necessary, you waive your preferential subscription rights:
• issue of ordinary shares or marketable securities conferring entitlement to ordinary shares of the Company or, in accordance with Article
L. 228-93 of the French Company Law (Code de commerce), of any company that owns, directly or indirectly, more than 50% of its capital
or in which it owns, directly or indirectly, more than 50% of the capital, and/or conferring entitlement to the grant of debt securities, with
retention of your preferential subscription rights (13th resolution);
• issue of ordinary shares or marketable securities conferring entitlement to ordinary shares of the Company or, in accordance with Article
L. 228-93 of the French Company Law (Code de commerce), of any company that owns, directly or indirectly, more than 50% of its capital
or in which it owns, directly or indirectly, more than 50% of the capital, and/or conferring entitlement to the grant of debt securities, with
waiver of your preferential subscription rights, by public exchange offers (14th resolution), it being specified that ordinary shares may be
issued in consideration of securities that may be contributed to the Company as part of a public exchange offer meeting the conditions
set forth in Article L. 225-148 of the French Company Law (Code de commerce);
• issue of ordinary shares or marketable securities conferring entitlement to ordinary shares of the Company and/or conferring entitlement
to the grant of debt securities, with waiver of your preferential subscription rights, as part of a private placement referred to in paragraph II
of Article L. 411-2 of the French Monetary and Financial Code (Code monétaire et financier) for up to a maximum of 20 % of the share
capital per year (15th resolution);
p that you authorize it, pursuant to the 16th resolution and in connection with the implementation of the delegation referred to in the 14th and
15th resolutions, to set the issue price for up to the annual legal maximum of 10 % of the share capital;
p that you delegate to it, for a period of 26 months, the authority to set the terms and conditions of an issue of ordinary shares or marketable
securities conferring entitlement to ordinary shares of the Company, in consideration of in-kind contributions made to the Company that
are comprised of equity securities or marketable securities conferring entitlement to the share capital, for up to a maximum of 10% of the
share capital (17th resolution).
The total nominal amount of potential capital increases likely to be carried out, immediately or in the future, may not exceed €80 million pursuant
to the 13th, 14th, 15th, 17th and 19th resolutions, it being specified that the total nominal amount of potential capital increases likely to be carried
out, immediately or in the future, pursuant to the 14th resolution, may not exceed €37 million. The total nominal amount of debt securities likely
to be issued may not exceed €1 billion pursuant to the 13th, 14th, 15th, 17th and 18th resolutions.
These ceilings include the additional number of marketable securities to be created as part of the delegations of authority resulting from the
13th, 14th and 15th resolutions, under the conditions set forth in Article L. 225-135-1 of the French Company Law (Code de commerce).
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It is the responsibility of the Board of Directors to prepare a report in accordance with Articles R. 225-113, R. 225-114 and R. 225-117 of the
French Company Law (Code de commerce). Our role is to express an opinion on the fair presentation of the quantified information extracted from
the accounts, on the proposed cancellation of preferential subscription rights and on certain other information concerning these transactions,
contained in this report.
We performed the procedures that we deemed necessary in accordance with the professional guidelines of the French Institute of Statutory
Auditors (Compagnie Nationale des Commissaires aux Comptes) relating to this type of engagement. These procedures consisted in verifying
the contents of the Board of Directors’ report in respect of these transactions and the terms and conditions governing the determination of
the issue price of equity securities to be issued.
Subject to a subsequent review of the terms and conditions of proposed issues that may be decided, we have no comments on the terms
and conditions governing the determination of the issue price of equity securities to be issued presented in the Board of Directors’ report in
connection with the 14th, 15th and 16th resolutions.
As this report does not include information on the terms and conditions governing the determination of the issue price of equity securities to
be issued pursuant to the 13th and 17th resolutions, we cannot express an opinion on the issue price calculation inputs.
Furthermore, as the issue price of equity securities to be issued has not been set yet, we do not express an opinion on the final terms and
conditions under which the issues will be performed and, as such, on the proposed cancellation of preferential subscription rights submitted
for your approval in the 14th, 15th, 16th and 17th resolutions.
In accordance with Article R.225-116 of the French Company Law (Code de commerce), we shall issue an additional report, if necessary, on
the performance by your Board of Directors of any issues with cancellation of your preferential subscription rights or of any issues of marketable
securities conferring access to the Company’s share capital and/or entitlement to the grant of debt instruments.
Neuilly-sur-Seine, March 30, 2011
The Statutory Auditors
French original signed by
ERNST & YOUNG et Autres
François Carrega
Deloitte & Associés
Arnaud de Planta
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7.2.2 STATUTORY AUDITORS’ REPORT ON THE ISSUE OF MARKETABLE SECURITIES CONFERRING ENTITLEMENT TO THE GRANT OF DEBT SECURITIES
Extraordinary Shareholders’ Meeting of April 28, 2011
18th resolution
(This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of English speaking readers.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France).
To the Shareholders,
In our capacity as Statutory Auditors of your Company and in accordance with the procedures provided for in Article L. 228-92 of the French
Company Law (Code de commerce), we hereby report to you on the proposed delegation of authority to the Board of Directors to decide
on the issue of marketable securities conferring entitlement to the grant of debt instruments, for a maximum nominal amount of €1 billion.
Shareholders are being asked to vote on this transaction.
Your Board of Directors recommends that, based on its report, you confer on it, for a period of 26 months, the authority to decide on this
transaction. When necessary, the Board of Directors will set the final terms and conditions of the debt instrument issue.
It is the responsibility of the Board of Directors to prepare a report in accordance with Articles R.225-113, R.225-114 and R.225-117 of the
French Company Law (Code de commerce). Our role is to express an opinion on the fair presentation of the quantified information extracted
from the accounts and on certain other information concerning the issue, contained in this report.
We performed the procedures that we considered necessary in accordance with the professional guidelines of the French National Institute
of Statutory Auditors (Compagnie Nationale des Commissaires aux Comptes) applicable to this engagement. Such procedures consisted in
verifying the contents of the Board of Directors’ report relating to this transaction.
As the final terms and conditions of this issue have not been set, we do not express an opinion on the final terms and conditions under which
the issue will be performed.
In accordance with Article R.225-116 the French Company Law (Code de commerce), we will issue an additional report, if necessary, when
your Board of Directors uses this authorization.
Neuilly-sur-Seine, March 30, 2011
The Statutory Auditors
French original signed by
ERNST & YOUNG et Autres
François Carrega
Deloitte & Associés
Arnaud de Planta
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7.2.3 STATUTORY AUDITORS’ REPORT ON THE ISSUE OF SHARES OR MARKETABLE SECURITIES WITH WAIVER OF PREFERENTIAL SUBSCRIPTION RIGHTS RESERVED FOR MEMBERS OF A COMPANY SAVINGS PLAN
Extraordinary Shareholders’ Meeting of April 28, 2011
21ST resolution
(This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of English speaking readers.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France).
To the Shareholders,
In our capacity as Statutory Auditors of your Company and in accordance with the procedures provided for in Articles L. 225-135, L.225-138
and L.228-92 of the French Company Law (Code de commerce), we hereby report to you on the proposed delegation of authority to the Board
of Directors to decide on an issue of shares or marketable securities conferring entitlement to the share capital, with waiver of your preferential
subscription rights, for a maximum nominal amount of €1.6 million, reserved for members of a Company or Group savings plan and/or of
affiliated French or foreign groupings within the meaning of Article L.225-180 of the French Company Law (Code de commerce) and Article
L.3344-1 of the French Labor Code (Code du travail). Shareholders are being asked to vote on this transaction.
Shareholders are asked to approve this issue pursuant to Article L. 225-129-6 of the French Company Law (Code de commerce) and Article
L. 3332-18 et seq. of the French Labor Code.
Your Board of Directors recommends that, based on its report, you confer on it, for a period of 26 months, the authority to set the terms and
conditions for one or more issues and proposes that you waive your preferential subscription rights. When necessary, the Board of Directors
will set the final terms and conditions of this transaction.
It is the Board of Directors’ responsibility to prepare a report in accordance with Articles R. 225-113, R. 225-114 and R.225-117 of the French
Company Law (Code de commerce). Our role is to express an opinion on the fairness of the quantified data extracted from the financial
statements, on the proposed waiver of preferential subscription rights and on certain other information pertaining to the issue as presented
in this report.
We performed the procedures that we considered necessary in accordance with the professional guidelines of the French National Institute
of Statutory Auditors (Compagnie Nationale des Commissaires aux Comptes) applicable to this engagement. Such procedures consisted in
verifying the contents of the Board of Directors’ report relating to this transaction and the terms and conditions under which the issue price
of the equity securities was determined.
Subject to our subsequent review of the terms and conditions of the issue(s) that will be decided, we have no comments to make on the
procedures for determining the issue price of the equity securities to be issued as presented in the Board of Directors’ report.
As the issue price of the equity securities to be issued has not been determined, we express no opinion on the final terms and conditions
under which the capital increase will be carried out and, consequently, on the proposed waiver of preferential subscription rights on which
you are being asked to vote.
In accordance with Article R. 225-116 of the French Company Law (Code de commerce) we will issue an additional report, if necessary, when
your Board of Directors uses this authorization.
Neuilly-sur-Seine, March 30, 2011
The Statutory Auditors
French original signed by
ERNST & YOUNG et Autres
François Carrega
Deloitte & Associés
Arnaud de Planta
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7.2.4 STATUTORY AUDITORS’ SPECIAL REPORT ON THE GRANTING OF SHARE SUBSCRIPTION OR PURCHASE OPTIONS TO EMPLOYEES AND CORPORATE OFFICERS
Extraordinary Shareholders’ Meeting of April 28, 2011
22nd resolution
(This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of English speaking readers.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France).
To the Shareholders,
In our capacity as Statutory Auditors of your Company and in accordance with the procedures provided for in Articles L.225-177 and R.225-144
of the French Company Law (Code de commerce), we have prepared this report on the granting of share subscription or purchase options to
employees and corporate officers of your Company, and, if applicable, to employees or corporate officers of affiliated companies or groupings
referred to in Article L. 225-180 of the French Company Law (Code de commerce), or to certain categories of them.
It is the responsibility of the Board of Directors to prepare a report on the reasons for the granting of share subscription or purchase options
and the proposed terms and conditions for determining the subscription or purchase price. It is our responsibility to comment on the proposed
terms and conditions for determining the subscription or purchase price.
We performed the procedures that we considered necessary in accordance with the professional guidelines of the French National Institute
of Statutory Auditors (Compagnie Nationale des Commissaires aux Comptes) applicable to this engagement. These procedures consisted in
verifying that the proposed terms and conditions for determining the subscription or purchase price are disclosed in the Board of Directors’
report, that they comply with legal provisions, in order to inform shareholders, and that they do not appear obviously inappropriate.
We have no comments on the proposed terms and conditions.
Neuilly-sur-Seine, March 30, 2011
The Statutory Auditors
French original signed by
ERNST & YOUNG et Autres
François Carrega
Deloitte & Associés
Arnaud de Planta
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7.2.5 STATUTORY AUDITORS’ SPECIAL REPORT ON THE FREE GRANT OF EXISTING SHARES OR SHARES TO BE ISSUED TO EMPLOYEES AND CORPORATE OFFICERS
Extraordinary Shareholders’ Meeting of April 28, 2011
23rd resolution
(This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of English speaking readers.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France).
To the Shareholders,
In our capacity as Statutory Auditors of your Company and in accordance with the procedures provided for in Article L. 225-197-1 of the
French Company Law (Code de commerce), we have prepared this report on the proposed free grant of existing shares or shares to be issued
to employees and corporate officers of the Company, and, where applicable, to employees or corporate officers of affiliated companies or
groupings within the meaning set forth in Article L. 225-197-2 of the French Company Law (Code de commerce), or to certain categories of them.
The Board of Directors also recommends that you confer on it the authority to grant shares for no consideration, whether existing or to be
issued. It is responsible for preparing a report on the transaction that it wishes to carry out. Our role is to inform you of our comments, if any,
on the information thus given to you on the proposed transaction.
We performed the procedures that we considered necessary in accordance with the professional guidelines of the French National Institute
of Statutory Auditors (Compagnie Nationale des Commissaires aux Comptes) applicable to this engagement. Our work consisted in verifying
more specifically that the proposed procedures and data presented in the Board of Directors’ report comply with the legal provisions.
We have no comments on the information given in the Board of Directors’ report in connection with the proposed free grant of shares.
Neuilly-sur-Seine, March 30, 2011
The Statutory Auditors
French original signed by
ERNST & YOUNG et Autres
François Carrega
Deloitte & Associés
Arnaud de Planta
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7.2.6 STATUTORY AUDITORS’ REPORT ON THE ISSUE OF SHARE SUBSCRIPTION OR PURCHASE WARRANTS WITH WAIVER OF PREFERENTIAL SUBSCRIPTION RIGHTS
Extraordinary Shareholders’ Meeting of April 28, 2011
24th resolution
(This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of English speaking readers.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France).
To the Shareholders,
In our capacity as Statutory Auditors of your Company and pursuant to the procedures set forth in the French Company Law (Code de
commerce), and in particular, Articles L.225-135, L.225-136 and L.228-92, we hereby present to you our report on the proposed delegations
of authority to the Board of Directors to carry out a capital increase, on one or more occasions, with waiver of your preferential subscription
right, reserved for employees and corporate officers of the Company and/or its French or foreign subsidiaries or groupings within the meaning
set forth on Articles L. 225-180 and L. 233-3 of the French Company Law (Code de commerce) or to certain categories of them, by the issue
of share subscription and/or purchase warrants. Shareholders are being asked to vote on this transaction.
Your Board of Directors recommends that, based on its report, you confer on it, for a period of 26 months, the authority to set the terms and
conditions for one or more issues and proposes that you waive your preferential subscription rights. When necessary, the Board of Directors
will set the final terms and conditions of this transaction.
It is the responsibility of the Board of Directors to prepare a report in accordance with Articles R. 225-113, R. 225-114 and R. 225-117 of the
French Company Law (Code de commerce). Our role is to express an opinion on the fair presentation of the quantified information extracted
from the accounts, on the proposed cancellation of preferential subscription rights and on certain other information concerning this transaction,
contained in this report.
We performed the procedures that we deemed necessary in accordance with the professional guidelines of the French Institute of Statutory
Auditors (Compagnie Nationale des Commissaires aux Comptes) relating to this type of engagement. These procedures consisted in verifying
the contents of the Board of Directors’ report in respect of this transaction and the terms and conditions governing the determination of the
issue price of equity securities to be issued.
We have the following comment to make on the Board of Director’s report:
In its report, the Board of Directors does not mention the issue price for share subscription warrants.
Furthermore, subject to our subsequent review of the terms and conditions of the issue(s) that will be decided, we have no comments to make
on the procedures for determining the issue price of the equity securities to be issued as presented in the Board of Directors’ report.
As the issue price of the equity securities to be issued has not been determined, we express no opinion on the final terms and conditions
under which the issue(s) will be carried out and, consequently, on the proposed waiver of preferential subscription rights on which you are
being asked to vote.
In accordance with Article R. 225-116 of the French Company Law (Code de commerce), we will issue an additional report, if necessary, when
your Board of Directors uses this authorization.
Neuilly-sur-Seine, March 30, 2011
The Statutory Auditors
French original signed by
ERNST & YOUNG et Autres
François Carrega
Deloitte & Associés
Arnaud de Planta
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7.2.7 STATUTORY AUDITORS’ REPORT ON THE DECREASE IN SHARE CAPITAL BY CANCELLATION OF PURCHASED SHARES
Extraordinary Shareholders’ Meeting of April 28, 2011
25th resolution
(This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of English speaking readers.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France).
To the Shareholders,
In our capacity as Statutory Auditors of your Company and in accordance with the procedures provided for in Article L. 225-209 of the French
Company Law (Code de commerce) on the decrease in share capital by the cancellation of purchased shares, we hereby report to you on our
assessment of the reasons for and the terms and conditions of the proposed share capital decrease.
This transaction involves the purchase by the Company of its own shares, up to a maximum of 10% of its share capital, pursuant to the terms
and conditions set forth in Article L. 225-209, of the French Company Law (Code de commerce). This purchase authorization is subject to the
approval of the Extraordinary Shareholders’ Meeting for a period of 18 months.
Shareholders are requested to confer all necessary powers on the Board of Directors, during a period of 26 months starting from the day of
this Extraordinary Shareholders’ Meeting, to cancel, on one or more occasions, up to a maximum of 10% of its share capital by 24-month
periods, the shares purchased by the Company pursuant to the authorization to purchase its own shares.
We performed the procedures that we considered necessary in accordance with the professional guidelines of the French National Institute
of Statutory Auditors (Compagnie Nationale des Commissaires aux Comptes) applicable to this engagement. Our procedures consisted, in
particular, in verifying the fairness of the reasons for and the terms and conditions of the proposed decrease in share capital, and ensuring
that it does not interfere with the equal treatment of shareholders.
We have no comments on the reasons for or the terms and conditions of the proposed share capital decrease, which, you are reminded, may
only be performed subject to the prior approval by the Extraordinary Shareholders’ Meeting of the purchase by the Company of its own shares.
Neuilly-sur-Seine, March 30, 2011
The Statutory Auditors
French original signed by
ERNST & YOUNG et Autres
François Carrega
Deloitte & Associés
Arnaud de Planta
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7.3 | AGENDA
ORDINARY PART
1. Approval of the Company’s management and annual financial statements for the financial year ended on December 31, 2010;
2. approval of the Group’s consolidated financial statements for the financial year ended on December 31, 2010;
3. allocation of earnings and determining of dividend with respect to the financial year ended on December 31, 2010;
4. Statutory Auditors’ special report on regulated commitments governed by articles L. 225-38 and L. 225-42-1 of the French Code of
Commerce entered into in favor of Mr. Gilles Michel, Deputy Chief Executive Officer and Director, and approval of said commitments;
5. ratification of the appointment of Mr. Gilles Michel as Director;
6. renewal of the term of office as Director of Mr. Aimery Langlois-Meurinne;
7. renewal of the term of office as Director of Mr. Gérard Buffière;
8. renewal of the term of office as Director of Mr. Aldo Cardoso;
9. renewal of the term of office as Director of Mr. Maximilien de Limburg Stirum;
10. renewal of the term of office as Director of Mr. Jacques Veyrat;
11. appointment of Mrs. Arielle Malard de Rothschild as new Director;
12. repurchase by the Company of its own shares.
EXTRAORDINARY PART
13. Delegation of authority to the Board of Directors for the purposes
of increasing capital by the issue of shares or securities giving
access, immediately or in the future, to capital with preemptive
subscription right;
14. delegation of authority to the Board of Directors for the purposes
of increasing capital by the issue of shares or securities giving
access, immediately or in the future, to capital without preemptive
subscription right;
15. delegation of authority to the Board of Directors for the purposes
of increasing capital by the issue of shares or securities giving
access, immediately or in the future, to capital without preemptive
subscription right, under an offering by private investment with
respect to section II of article L. 411-2 of the French Monetary
and Financial Code;
16. authorization to the Board of Directors to set the issue price of
shares or securities giving access to capital, in the event of the
cancellation of the preemptive subscription right, within the limit
of 10% of capital per year;
17. delegation of powers to the Board of Directors for the purposes
of increasing capital in compensation for contributions in kind
comprised of securities representing shares in or giving access
to capital, within the limit of 10 %of capital per year;
18. delegation of authority to the Board of Directors to issue
securities giving entitlement to an allotment of debt instruments;
19. delegation of authority to the Board of Directors for the purposes
of increasing capital by capitalization of premiums, reserves,
income or other items;
20. overall limitation of the nominal amount of issues of common
shares and debt securities that may result from the above
delegations and authorizations;
21. delegation of authority to the Board of Directors for the purposes
of increasing capital by the issue of shares reserved for members
of a company savings plan of the Company or its Group;
22. renewal of authorization to grant options for subscription or
purchase of the Company’s shares to employees or officers of
the Company and its subsidiaries, or to certain categories of
them;
23. renewal of authorization to make allotments of free Company’s
shares to employees or officers of the Company and its
subsidiaries, or to certain categories of them;
24. delegation of authority to the Board of Directors to issue
share subscription and/or acquisition warrants to employees
and officers of the Company and its subsidiaries, or to
certain categories of them, without shareholders’ preemptive
subscription right;
25. authorization to the Board of Directors to reduce share capital
by canceling shares held by the Company;
26. powers.
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Draft resolutions
7.4 | DRAFT RESOLUTIONS
ORDINARY PART
❚ FIRST RESOLUTION
Approval of the Company’s management and annual financial
statements for the financial year ended on December 31, 2010
The Shareholders’ General Meeting, ruling in the quorum and majority
conditions required for ordinary Shareholders’ General Meetings,
having considered the Board of Directors’ report and the Auditors’
report relating to the Company’s financial statements for the financial
year ended on December 31, 2010 approves, as presented, such
financial statements, as well as the transactions evidenced by such
financial statements and summarized in such reports.
❚ SECOND RESOLUTION
Approval of the Group’s consolidated financial statements for the
financial year ended on December 31, 2010
The Shareholders’ General Meeting, ruling in the quorum and majority
conditions required for ordinary Shareholders’ General Meetings,
having considered the Board of Directors’ report and the Auditors’
report relating to the Group’s consolidated financial statements
for the financial year ended on December 31, 2010 approves, as
presented, such financial statements as well as the transactions
evidenced by such financial statements and summarized in such
reports.
❚ THIRD RESOLUTION
Allocation of earnings and determining of dividend with respect to the financial year ended on December 31, 2010
The Shareholders’ General Meeting, ruling in the quorum and majority conditions required for ordinary Shareholders’ General Meetings, having
considered the Board of Directors’ report:
acknowledges that the Company’s profit for the past financial year is: €83,645,324.81
decides to withdraw an amount of:
to raise the legal reserve to 10% of the share capital
€(16,931.80)
the balance increased by the retained earnings amounting to: €369,029,828.11
represents a total distributable amount of: €452,658,221.12
resolves to pay in respect of financial 2010 a dividend of €1.20 to each of the 75,474,155 shares that make up the share capital
as on January 1, 2011, which represents a distribution of: €(90,568,986.00)
and allocates the remaining amount to retained earnings which now amount to: €362,089,235.12
The Shareholders’ General Meeting decides that the total amount of
the dividend paid out shall be adjusted according to the exercise of
subscription options for shares entitled to the dividend with respect
to financial 2010 as on the payment date of that dividend. The amount
allocated to retained earnings shall be determined on the basis of
the total amount of dividend effectively paid out.
The Shareholders’ General Meeting decides that the dividend will be
paid as from May 11, 2011.
If the Company were to be holding some of its own shares on the
date of payment of the dividend, the sums corresponding to the
dividends that would not have been paid out as a result would be
allocated to retained earnings.
In accordance with article 243 bis of the French General Tax Code,
the proposed dividend is eligible for the 40% allowance provided
for by 2° of 3 of Article 158 of the French General Tax Code, from
which private individuals domiciled in France for tax purposes may
benefit; this allowance shall not apply if the beneficiary have opted
for liability to the 19% withholding governed by article 117 quarter of
the French General Tax Code.
The Shareholders’ General Meeting acknowledges that the sums paid out as dividends with respect to the previous three financial years were
as follows:
Financial 2009 Financial 2008 Financial 2007
Net dividend per share €1.00* €1.00* €1.90*
Number of shares compensated 75,505,458 62,787,810 62,618,358
Total net distribution €75.5 M €62,8 M €118,9 M
(*) Dividend eligible for the 40% allowance.
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❚ FOURTH RESOLUTION
Statutory Auditors’ special report on regulated agreements and
commitments governed by articles L. 225-38 and L. 225-42-1 of
the French Code of Commerce entered into in favor of Mr. Gilles
Michel, Deputy Chief Executive Officer and Director, and approval
of said agreements and commitments
The Shareholders’ General Meeting, ruling in the quorum and
majority conditions required for ordinary Shareholders’ General
Meetings, having considered the Statutory Auditors’ special report
drawn up pursuant to the provisions of article L. 225-40 of the French
Code of Commerce, and ruling on this report, approves pursuant to
articles L. 225-38 and L. 225-42-1 of the French Code of Commerce,
the agreements and commitments taken by the Company in favor
of Mr. Gilles Michel, Deputy Chief Executive Officer and Director, as
authorized by the Board of Directors at its meeting of November 3,
2010.
❚ FIFTH RESOLUTION
Ratification of Mr. Gilles Michel’s appointment as Director
The Shareholders’ General Meeting, ruling in the quorum and majority
conditions required for ordinary Shareholders’ General Meetings,
after examining the Board of Directors’ report, ratify the decision of
the Board of Directors made at its meeting of November 3, 2010,
to appoint Mr. Gilles Michel as Director to replace Mr. Gilbert Milan,
who resigned, for the remaining duration of his predecessor’s term,
that is, until the Shareholders’ General Meeting called upon in 2012
to approve management and financial statements for financial 2011.
❚ SIXTH RESOLUTION
Renewal of Mr. Aimery Langlois-Meurinne’s term of office as Director
The Shareholders’ General Meeting, ruling in the quorum and majority
conditions required for ordinary Shareholders’ General Meetings,
having considered the Board of Directors’ report, acknowledging
that Mr. Aimery Langlois-Meurinne’s term of office as Director expires
following the present General Meeting, resolves to renew such term
for a period that, pursuant to statutory provisions, will expire at the
end of the Shareholders’ General Meeting called upon in 2014 to rule
on the management and financial statements for financial year 2013.
❚ SEVENTH RESOLUTION
Renewal of Mr. Gérard Buffière’s term of office as Director
The Shareholders’ General Meeting, ruling in the quorum and majority
conditions required for ordinary Shareholders’ General Meetings,
having considered the Board of Directors’ report, acknowledging that
Mr. Gérard Buffière’s term of office as Director expires following the
present General Meeting, resolves to renew such term for a period
that, pursuant to statutory provisions, will expire at the end of the
Shareholders’ General Meeting called upon in 2014 to rule on the
management and financial statements for financial year 2013.
❚ EIGHTH RESOLUTION
Renewal of Mr. Aldo Cardoso’s term of office as Director
The Shareholders’ General Meeting, ruling in the quorum and majority
conditions required for ordinary Shareholders’ General Meetings,
having considered the Board of Directors’ report, acknowledging
that Mr. Aldo Cardoso’s term of office as Director expires following
the present General Meeting, resolves to renew such term for a
period that, pursuant to statutory provisions, will expire at the end
of the Shareholders’ General Meeting called upon in 2014 to rule on
the management and financial statements for financial year 2013.
❚ NINTH RESOLUTION
Renewal of Mr. Maximilien de Limburg Stirum’s term of office as
Director
The Shareholders’ General Meeting, ruling in the quorum and majority
conditions required for ordinary Shareholders’ General Meetings,
having considered the Board of Directors’ report, acknowledging that
Mr. Maximilien de Limburg Stirum’s term of office as Director expires
following the present General Meeting, resolves to renew such term
for a period that, pursuant to statutory provisions, will expire at the
end of the Shareholders’ General Meeting called upon in 2014 to rule
on the management and financial statements for financial year 2013.
❚ TENTH RESOLUTION
Renewal of Mr. Jacques Veyrat’s term of office as Director
The Shareholders’ General Meeting, ruling in the quorum and majority
conditions required for ordinary Shareholders’ General Meetings,
having considered the Board of Directors’ report, acknowledging that
Mr. Jacques Veyrat’s term of office as Director expires following the
present General Meeting, resolves to renew such term for a period
that, pursuant to statutory provisions, will expire at the end of the
Shareholders’ General Meeting called upon in 2014 to rule on the
management and financial statements for financial year 2013.
❚ ELEVENTH RESOLUTION
Appointment of Mrs. Arielle Malard de Rothschild as new Director
The Shareholders’ General Meeting, ruling in the quorum and majority
conditions required for ordinary Shareholders’ General Meetings,
having considered the Board of Directors’ report, resolves to appoint
as from this day as a new Director, Mrs. Arielle Malard de Rothschild,
for a period that, pursuant to statutory provisions, will expire at the
end of the Shareholders’ General Meeting called upon in 2014 to rule
on the management and financial statements for financial year 2013.
❚ TWELFTH RESOLUTION
Repurchase by the Company of its own shares
The Shareholders’ General Meeting, ruling in the quorum and
majority conditions required for ordinary Shareholders’ General
Meetings, having considered the Board of Directors’ report pursuant
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to the provisions of article L. 225-209 et seq. of the French Code of
Commerce and Articles 241-1 to 241-6 of the General Regulations
of Autorité des marchés financiers (AMF):
1) authorizes the Board of Directors, with the possibility of sub-
delegating under the conditions provided by law, to make
purchases of the Company’s own shares:
• for the cancellation of the shares thus bought and, as the
case may be, any shares bought under previous buyback
authorizations provided that the twenty-fifth resolution be
approved by the present Shareholders’ General Meeting;
• in order to ensure the liquidity of the market through an
investment services firm acting in the name and on behalf of the
Company on a fully independent basis without being influenced
by the Company, under a liquidity contract in accordance with
a code of conduct recognized by AMF, or in any other manner
agreed by the applicable regulations;
• in order to grant or transfer some shares to employees,
former employees or corporate officers of the Company and
companies that are affiliated pursuant to articles L. 225-180
and L. 233-3 of the French Code of Commerce, in particular
employee shareholding plans, stock purchase options plans,
or grants of free shares plans, under the conditions provided
by law and provided that the twenty-first, the twenty-second
and the twenty-third resolutions be approved by the present
Shareholders’ General Meeting;
• for the delivery or exchange of shares, particularly with respect
to the issue of securities that give access, immediately or in the
future, to shares in the Company or with respect to external
growth;
• and, in general, for any purposes that are permitted or may
come to be authorized by the regulations in force.
The acquisition, sale, transfer or exchange of the shares may be
carried out, in compliance with the regulations in force, on the market
or by mutual agreement and by any means, including the transfer
of blocks and the use or exercise of any financial instrument or
derivative.
2) sets the following limits for the use of the present authorization
by the Board of Directors:
• the maximum number of shares that may be purchased shall
not exceed 10% of the total number of shares issued and
outstanding as of January 1, 2011, that is 7,547,415 shares;
• the number of shares that the Company may hold, whether
directly or indirectly and at any time whatsoever, shall not
exceed 10% of the shares that make up the Company’s capital;
• the maximum purchase price of the shares shall not be greater
than €80;
• consequently, the maximum amount that the Company is
liable to use for such repurchases shall not be greater than
€603,8 million;
3) resolves that, in the event that the par value of the stock is
modified, the capital is increased by the capitalization of reserves
or free shares are granted, or in the event of a stock split or
consolidation, the above-stated maximum amount devoted
to these buybacks and the maximum number of shares to be
repurchased will be adjusted accordingly by a multiplier equal to
the ratio between the number of shares that made up the capital
before the operation and the resulting number after the operation;
4) sets at eighteen months from the date of this General Meeting
the term of this authorization, which renders null and void, for the
unused part, any previous authorizations granted to the Board of
Directors with regard to the Company’s repurchase of its shares;
5) grants full powers to the Board of Directors, with the authority
to delegate such powers under the conditions provided by law,
to implement this authorization and, in particular, to sign any
stock purchase, sale, exchange or transfer agreements, file any
statements with Autorité des marchés financiers or any other
agency, proceed with the adjustments set forth above, complete
any formalities and, generally, do what is necessary.
EXTRAORDINARY PART
❚ THIRTEENTH RESOLUTION
Delegation of authority to the Board of Directors for the purposes
of increasing the share capital by the issue of common shares or of
securities giving access to capital immediately or in the future with
preemptive subscription right
The Shareholders’ Meeting, ruling in the quorum and majority
conditions required for extraordinary general meetings, after
examining the Board of Directors’ report and the Auditors’ special
report and in accordance with the provisions of Articles L. 225-129-2,
L. 228-91 et seq. of the French Code of Commerce:
1) delegates its authority to the Board of Directors to decide the
capital increase of the Company, in one or more times, in the
proportions and at the times that it judges fit, on the French market
and/or the international market, in euros or any other currency by
the issue, with preemptive subscription right, of common shares
and/or any other securities in the Company, whether or not they
represent debt, giving access by any means, immediately or in
the future, at any time or on set dates, to common shares in the
Company existing or to be issued, or, in accordance with article
L. 228-93 of the French Code of Commerce, in any company that
directly or indirectly owns more than half its capital or of which it
directly or indirectly owns more than half the capital, whether by
subscription, conversion, exchange, redemption, presentation
of a warrant of in any other way, such securities being issued in
euros or in any monetary unit determined by reference to several
currencies;
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2) resolves to limit as follows the amounts of the authorized issues in
the event of the Board of Directors using the present delegation
of authority:
• the total nominal amount of common shares that may be
issued, whether directly or on presentation of securities,
pursuant to the present delegation shall not be greater than
€80 million, which represents, for guidance only, 53% of
the Company’s capital as on December 31, 2010, it being
specified that the nominal amount of those issues shall be
charged against the total ceiling for rights issues set down
in the twentieth resolution, and that any additional nominal
amount of shares to be issued to maintain, in accordance with
the law and applicable contractual stipulations, the rights of
bearers of securities or of rights giving access to capital shall
be added to that amount;
• the total nominal amount of debt securities that may be issued
pursuant to the present delegation and which give access,
whether immediately or in the future, to the Company’s capital,
shall not be greater than €1 billion or the equivalent of that
amount on the date of the issue decision, it being specified that
the nominal amount of these issues shall be charged against
the overall issue ceiling for debt securities set down in the
twentieth resolution;
3) in the event of the use of the present delegation of authority:
• resolves that the issue or issues shall be preferentially reserved
for shareholders who may subscribe on an irreducible basis;
• grants the Board of Directors the possibility of instituting a
reducible subscription right;
• empowers the Board of Directors, if it notes excess demand,
to increase the number of securities planned in the initial issue
under the conditions of article L. 225-135-1 of the French Code
of Commerce and within the percentage limit of the initial issue
provided by the legal and regulatory provisions in force at the
time of the issue, it being understood that the issue price shall
be the same as that of the initial issue and that the nominal
amount of the corresponding issues shall be charged to the
amount of the above-mentioned ceiling;
• in accordance with the provisions of article L. 225-134 of the
French Code of Commerce, resolves that, if the irreducible
subscriptions and, as the case may be, any reducible
subscriptions have not taken up the whole of an issue as
defined above, the Board of Directors may use one or more of
the following possibilities in the order that it judges fit:
- limit the amount of the subscriptions, provided that such
amount is at least three-quarters of the intended issue,
- freely allocate all or part of the unsubscribed securities,
- offer all or part of the unsubscribed securities to the public;
4) acknowledges that the present delegation entails the waiver by
the shareholders of their preemptive subscription right to the
shares to which the securities issued pursuant to the present
delegation shall give the right;
5) resolves that the Board of Directors shall, within the limits set
down above, have the necessary powers to:
• set the terms and conditions of the issue or issues, particularly
the forms and characteristics of the securities to be issued, set
the subscription opening and closing dates, acknowledge the
completion of the resulting capital increases and amend the
by-laws accordingly;
• charge, on its sole initiative, the capital increase expenses to
the amount of related premiums and take from that amount
the sums needed to increase the legal reserve to one-tenth of
capital after each increase;
• make any adjustments required in accordance with
applicable legal and contractual provisions and determine the
arrangements, as the case may be, for maintaining the rights
of the holders of securities or rights giving access to capital;
• in turn delegate the powers needed to carry out the issue,
or to refrain therefrom, within the limits and according to the
terms and conditions that the Board of Directors may set down
beforehand, to the Chief Executive Officer or, in agreement with
him, to one or more delegate Chief Executive Officers;
• and, more generally, take any measures, enter into any
agreements, carry out any formalities and do what is
necessary for the satisfactory completion of the issues under
consideration;
6) sets at twenty-six months as from the date of the present
Shareholders’ Meeting the duration of the present delegation,
which renders null and void any previous delegation granted to
the Board of Directors for the same purposes for the unused part.
❚ FOURTEENTH RESOLUTION
Delegation of authority to the Board of Directors for the purposes
of increasing the share capital by the issue of common shares or
securities giving access immediately or in the future to capital, with
cancellation of the preemptive subscription right
The Shareholders’ Meeting, ruling in the quorum and majority
conditions required for extraordinary general meetings, after
examining the Board of Directors’ report and the Auditors’ special
report and in accordance with the provisions of articles L. 225-129-2,
L. 225-135, L. 225-135-1, L. 225-136 and L. 228-91 et seq. of the
French Code of Commerce:
1) delegates to the Board of Directors its authority to decide the
capital increase of the Company, in one or more times, in the
proportions and at the times that it sees fit, on the French market
and/or the international market, by making a public offering by
the issue in euros or any other currency of common shares
and/or any other securities in the Company, which may or not
represent debt, giving access by any means, immediately or in
the future, at any time or on set dates, to common shares in the
Company existing or to be issued or, in accordance with article
L. 228-93 of the French Code of Commerce, in a company that
directly or indirectly owns more than half of its capital or of which
it directly or indirectly owns more than half the capital, whether
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by subscription, conversion, exchange, redemption, presentation
of a warrant of in any other way, such securities being issued in
euros or in any monetary unit determined by reference to several
currencies;
2) resolves to limit the amounts of issues authorized in the event of
the Board of Directors using the present delegation of authority:
• the total nominal amount of the shares that may be issued,
whether directly or on presentation of securities, pursuant to
the present delegation shall not be greater than €37 million, i.e.,
for guidance only, approximately 25% of the Company’s capital
as on December 31, 2010, it being specified that the nominal
amount of these issues shall be charged against the overall
ceiling for capital issues set down in the twentieth resolution,
and that any additional nominal amount of shares to be
issued to maintain, in accordance with the law and applicable
contractual stipulations, the rights of bearers of securities or of
rights giving access to capital shall be added to that amount;
• the total nominal amount of the debt securities that may be
issued pursuant to the present delegation and which give
access, whether immediately or in the future, to the Company’s
capital shall not be greater than €1 billion or the equivalent
amount on the date of the issue decision, it being stipulated
that the nominal amount of these issues shall be charged
against the overall ceiling for debt securities set down in the
twentieth resolution;
3) resolves to cancel the preemptive subscription right of
shareholders to the securities concerned by the present
resolution, while however giving the Board of Directors the
possibility, in accordance with the provisions of article L. 225-
135 of the French Code of Commerce, to grant shareholders,
for a period and at the terms and conditions that it shall set and
for all or part of an issue, a subscription priority that does not
give the right to the creation of negotiable rights, which must be
exercised in proportion to the number of shares owned by each
shareholder;
4) acknowledges that the present delegation entails the waiver by
the shareholders of their pre-emptive subscription right to the
shares in the Company to which the securities issued pursuant
to the present delegation may give the right;
5) decides that:
• the issue price of the common shares issued pursuant to
the present delegation shall be determined by the Board
of Directors in accordance with the provisions of articles L.
225-136 1° and R. 225-119 of the French Code of Commerce
and shall be at least equal to the weighted average price of
the Imerys share for the three trading sessions prior to the
determination of that price, minus a maximum possible
discount of 5%;
• the issue price of the securities giving access to the Company’s
capital shall be such that the sum immediately received, plus,
as the case may be, the sum that may to be received later, shall,
for each common share in the Company issued as a result of
the issue of those securities, be at least equal to the minimum
price defined in the previous paragraph after correcting, if need
be, that amount to take into account the difference in dated
date;
6) resolves that the Board of Directors may, within the limit of the
overall issue amount authorized in paragraph 2) above, issue
common shares and/or securities giving access, whether
immediately or in the future, to the Company’s capital, in
compensation for the securities contributed to the Company with
respect to a public exchange offer within the limits and under the
conditions provided by article L. 225-148 of the French Code of
Commerce;
7) resolves that the Board of Directors shall, within the limits set
down above, have the necessary powers to:
• set the terms and conditions of the issue or issues, particularly
the forms and characteristics of the securities to be issued, set
the subscription opening and closing dates, acknowledge the
completion of the resulting capital increases and amend the
by-laws accordingly;
• increase, if it notes excess demand, the number of securities
planned in the initial issue under the conditions provided for
by article L. 225-135-1 of the French Code of Commerce and
within the percentage limit of the initial issue provided by the
legal and regulatory provisions in force at the time of the issue,
it being understood that the issue price shall be the same as
that of the initial issue;
• in the event of the issue of securities intended as compensation
for securities contributed with respect to a public exchange
offer: draw up the number and characteristics of securities
contributed in exchange, set the terms and conditions of the
issue, the exchange rate and, as the case may be, the amount
of the balancing cash adjustment to be made in cash, and
determine the arrangements for the issue;
• charge, on its sole initiative, the capital increase expenses to
the amount of related premiums and take from that amount
the sums needed to increase the legal reserve to one-tenth of
capital after each increase;
• make any adjustments required in accordance with
applicable legal and contractual provisions and determine the
arrangements, as the case may be, for maintaining the rights
of the holders of securities or rights giving access to capital;
• in turn delegate the powers needed to carry out the issue,
or to refrain therefrom, within the limits and according to the
terms and conditions that the Board of Directors may set down
beforehand, to the Chief Executive Officer or, in agreement with
him, to one or more delegate Chief Executive Officers;
• and, more generally, take any measures, enter into any
agreements, carry out any formalities and do what is
necessary for the satisfactory completion of the issues under
consideration;
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8) sets at twenty-six months as from the date of the present
Shareholders’ Meeting the duration of the present delegation,
which renders null and void any previous delegation granted to
the Board of Directors for the same purposes.
❚ FIFTEENTH RESOLUTION
Delegation of authority to the Board of Directors for the purposes
of increasing capital by the issue of shares or securities giving
access, immediately or in the future, to capital without preemptive
subscription right, under an offering by private investment with
respect to section II of article L. 411-2 of the French Monetary and
Financial Code
The Shareholders’ Meeting, ruling in the quorum and majority
conditions required for extraordinary general meetings, after
examining the Board of Directors’ report and the Auditors’ special
report and in accordance with the provisions of articles L. 225-129-2,
L. 225-135, L. 225-136 and L. 228-91 et seq. of the French Code of
Commerce and article L. 411-2 of the French Monetary and Financial
Code:
1) delegates to the Board of Directors its authority to decide the
capital increase of the Company, in one or more times, in the
proportions and at the times that it sees fit, with respect to an
offering by private investment as provided by section II of article
L. 411-2 of the Monetary and Financial Code, carried out in France
or another country, concerning common shares and/or any other
securities in the Company giving access, whether immediately
or in the future, at any time or on set dates, to common shares,
whether in existence or to be issued, in the Company, whether
by subscription, conversion, exchange, retirement, presentation
of a warrant or in any other way, with the possibility of stating the
securities thus issued in foreign currencies or any monetary unit
established in reference to several currencies;
2) acknowledges that the issues that may be made pursuant to the
present delegation are, in accordance with the law, limited to 20%
of capital per year, it being stipulated that this period of one year
runs from each issue made pursuant to the present delegation;
3) resolves to set as follows the amount of authorized issues in the
event of the Board of Directors’ use of the present delegation of
authority:
• the total nominal amount of shares that may be issued pursuant
to the present delegation shall not be greater than 20% of the
Company’s capital on the day of issue, it being stipulated that
the nominal amount of these issues shall be charged against
the specific capital increase ceiling provided by paragraph 2 of
the fourteenth resolution below, and that any additional nominal
amount of shares to be issued to maintain, in accordance with
the law and applicable contractual stipulations, the rights of
bearers of securities or of rights giving access to capital shall
be added to that amount;
• the total nominal amount of debt securities that may be issued
pursuant to the present delegation and which give access,
whether immediately or in the future, to the Company’s capital
shall not be greater than €1 billion or the equivalent amount
on the date of the issue decision, it being stipulated that the
nominal amount of these issues shall be charged against the
overall ceiling for issues of debt securities set down in the
twentieth resolution;
4) resolves to cancel the preemptive subscription right for
shareholders to the securities coming under the present
resolution;
5) acknowledges that the present delegation entails the waiver by
the shareholders of their preemptive subscription right to the
shares in the Company to which the securities issued pursuant
to the present delegation may give the right;
6) resolves that:
• the issue price of the common shares issued pursuant to the
present delegation shall be set by the Board of Directors in
accordance with the provisions of articles L. 225-136 1° and
R. 225-119 of the French Code of Commerce and shall be at
least equal to the weighted average of Imerys share prices for
the last three trading sessions prior to its definition, reduced
as the case may be by a maximum 5% discount,
• the issue price of the securities giving access to the Company’s
capital shall be such that the sum received immediately, plus,
as the case may be, the sum to received later, shall, for every
common share in the Company issued as a result of the issue
of those securities, be at least equal to the minimum price
defined in the previous paragraph after correcting, if need be,
that amount to take into account the difference in dated date;
7) resolves that the Board of Directors shall, within the limits set
down above, have the necessary powers to:
• set the conditions of the issue(s), particularly the forms
and characteristics of the securities to be created, set the
subscription opening and closing dates, acknowledge the
completion of the resulting capital increases, and amend the
by-laws accordingly,
• increase, if it observes excess demand, the number of
securities planned in the initial issue under the conditions of
article L. 225-135-1 of the French Code of Commerce and
within the limit of the initial percentage of the issue provided by
legal and regulatory provisions in force at the time of the issue,
it being understood that the issue price shall be the same as
that retained for the initial issue,
• charge, on its sole initiative, capital increase expenses against
the amount of related premiums and take from that amount
the sums needed to increase the legal reserves to one-tenth
of capital after each increase,
• make any adjustments required in compliance with
applicable legal and contractual provisions and set down the
arrangements, as the case may be, for maintaining the rights
of bearers of securities or rights giving access to capital,
• itself delegate to the Chief Executive Officer, or with his
agreement to one or more delegate Chief Executive Officers,
the powers needed to complete the capital increase and to
delay it within the limits and according to the arrangements
that Board of Directors may set down beforehand,
• and, more generally, take any measures, enter into any
agreements, carry out any formalities and do whatever
is necessary to complete the issues under consideration
successfully;
8) sets at twenty-six months as from the date of the present
Shareholders’ Meeting the duration of the present delegation.
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❚ SIXTEENTH RESOLUTION
Authorization to the Board of Directors for the purposes of setting the
issue price of common shares and securities giving access to capital,
in the event of cancellation of the preemptive subscription right of
shareholders and within the limit of 10% of share capital per year
The Shareholders’ Meeting, ruling in the quorum and majority
conditions required for extraordinary general meetings, after
examining the Board of Directors’ report and the Auditors’ special
report and in accordance with the provisions of articles L. 225-129-2
and L. 225-136, 2° of paragraph 1 of the French Code of Commerce:
1) authorizes the Board of Directors, in the event of an issue of
common shares and/or securities giving access to capital without
preemptive subscription rights, in the conditions provided by the
fourteenth and fifteenth resolutions, within the annual limit of 10%
of the Company’s capital as it exists at the end of the month prior
to the issue date, to derogate from the price-setting conditions
and set the issue price of common shares or securities giving
access to capital at an amount that shall be at the least equal to:
• in the case of the issue price of common shares, the closing
price of Imerys stock on the Euronext Paris market on the
trading day prior to the date of setting the issue price, possibly
reduced by a maximum 10% discount, and
• in the case of the issue price of securities giving access to
capital, the amount such that the sum immediately received
by the Company, plus, as the case may be, the amount to be
perceived at a later date by the Company, i.e. for every common
share issued as a result of the issue of those securities, at least
equal to the issue price referred to in the previous paragraph;
2) states, as need be, that the amount of the issues made with
respect to the present delegation shall be charged against the
specific ceiling for capital increases referred to in paragraph 2 of
the fourteenth resolution above;
3) sets at twenty-six months as from the date of the present
Shareholders’ Meeting the duration of the present delegation,
which renders null and void any previous delegation granted to
the Board of Directors for the same purposes.
❚ SEVENTEENTH RESOLUTION
Authorization to the Board of Directors for the purposes of increasing
the share capital in compensation for contributions in kind made up
of securities representing shares in or giving access to capital, within
the limit of 10% of the share capital per year
The Shareholders’ Meeting, ruling in the quorum and majority
conditions required for extraordinary general meetings, after
examining the Board of Directors’ report and the Auditors’ special
report and in accordance with the provisions of articles L. 225-147
and L. 228-91 et seq. of the French Code of Commerce:
1) delegates to the Board of Directors the powers needed for the
purposes of carrying out, upon the report of one or more capital
contributions auditors, within the limit of 10% of the Company’s
capital, as it exists on the date on which the present delegation
is used, the issue of common shares and/or any other securities,
whether or not debt securities, which give access by any means,
whether immediately or in the future, at any time or at set dates,
to common shares, whether in existence or to be created, in the
Company, in compensation for the contributions in kind made to
the Company and made up of securities representing shares in
or giving access to capital, if the provisions of article L. 225-148
of the French Code of Commerce do not apply;
2) resolves, as need be, to cancel the preemptive subscription
right for shareholders to the securities issued with respect to the
present delegation for the benefit of the bearers of the securities
representing shares in or giving access to capital which make up
the contributions in kind;
3) resolves that the nominal amount of the issues carried out
pursuant to the present delegation shall be charged against the
specific ceiling for capital increases referred to in paragraph 2 of
the fourteenth resolution, and that any additional nominal amount
of shares to be issued to maintain, in accordance with the law
and applicable contractual stipulations, the rights of bearers of
securities or of rights giving access to capital shall be added to
that amount;
4) acknowledges that the present delegation entails the waiver by
the shareholders of their preemptive subscription right to the
shares in the Company to which the securities issued pursuant
to the present delegation may give the right;
5) resolves that the Board of Directors shall have, within the limits set
above, the powers needed, with the possibility of subdelegating
in the conditions provided by law, to rule on the appraisal of the
contributions and the report of the capital contributions auditor(s),
set down the arrangements and conditions for the authorized
operations and, in particular, the appraisal of the contributions
and, as the case may be, the grant of special advantages, set
down the number and characteristics of the securities to be
issued in compensation for the contributions, make any charges,
as the case may be, to the share premiums, amend the by-laws
accordingly, carry out any formalities, make any statements and
do what is necessary to complete successfully the operations
thus authorized;
6) sets at twenty-six months as from the date of the present
Shareholders’ Meeting the duration of the present delegation,
which renders null and void any previous delegation granted to
the Board of Directors for the same purposes.
❚ EIGHTEENTH RESOLUTION
Delegation of authority to the Board of Directors to issue securities
giving entitlement to an allotment of debt instruments
The Shareholders’ Meeting, ruling in the quorum and majority
conditions required for extraordinary general meetings, after
examining the Board of Directors’ report and the Auditors’ special
report and in accordance with the provisions of articles L. 225-129-2
to L. 225-129-6 and L. 228-91 et seq. of the French Code of
Commerce:
1) delegates to the Board of Directors its authority to issue, in one
or more times, on its sole decisions, in the proportion and at
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the dates that it shall determine, on the French market and/or
the international market, in euros or any other currency, any
securities (other than shares) giving entitlement, immediately or
in the future, to an allotment of debt instruments, including bonds
or related securities, subordinated securities for a determinate or
indeterminate period and any other securities giving, in the same
issue, a debt right in the Company;
2) resolves that the maximum nominal amount of the issues, in the
event of the Board of Directors using the present delegation of
authority, shall not exceed the ceiling of €1 billion or the equivalent
amount in any other currency at the issue date, it being specified
that the nominal amount of the securities to be issued shall be
charged against the overall ceiling for issues of debt securities
set in the twentieth resolution;
3) resolves that the Board of Directors shall have, within the limits
set down above, the necessary powers, with the possibility of
subdelegating in the conditions provided by law, to:
• set down the conditions and arrangements for each issue and
all the characteristics of the securities to be issued and of
the debt securities to which they would give the right of grant
and, in particular, their par value, dated date, issue price, with
premium as the case may be (said premium being charged
against the maximum amount referred to in paragraph 2)
above), interest rate, whether fixed or variable, and its date
of payment, the arrangements as the case may be for the
subordination of the principal and/or interest, the arrangements
for depreciation and/or early repayment, as the case may be
with or without premium, or even buyback by the Company,
their duration and any other characteristics;
• resolve, as the case may be, to allocate a guarantee or
security interests to the securities to be issued, and to the
debt securities to which those securities may give the right of
grant, and set down the nature and characteristics thereof;
• in general, set down all the arrangements for each issue,
enter into any agreements, take any measures, carry out
any formalities and do what is necessary for the satisfactory
completion of the issues under consideration;
4) sets at twenty-six months as from the date of the present
Shareholders’ Meeting the duration of the present delegation.
❚ NINETEENTH RESOLUTION
Delegation of authority to the Board of Directors for the purposes of
increasing the share capital by capitalization of premiums, reserves,
income or other items
The Shareholders’ Meeting, ruling in the quorum and majority
conditions required for ordinary general meetings, after examining
the Board of Directors’ report and in accordance with the provisions
of articles L. 225-129, L. 225-129-2 and L. 225-130 of the French
Code of Commerce:
1) delegates to the Board of Directors its authority to decide the
capital increase of the Company, in one or more times, in the
proportions and at the times that it sees fit, by capitalization of
all or part of premiums, reserves, income or other items which
incorporation to the capital would be admitted, in the form of a
free share grant or an increase in the par value of existing shares
or by the combined use of those processes;
2) resolves that the total nominal amount of the common shares that
may be issued under the present delegation, shall not be greater
than the specific ceiling of capital increase set at paragraph 2 of
the thirteenth resolution above, it being specified that to such
amount shall be added, as the case may be, the additional
amount of any shares to be issued to maintain, in accordance
with the applicable law and contractual terms, the rights of the
holders of securities or rights giving access to capital that shall
exist on the issue date;
3) resolves that the Board of Directors shall, within the limits set
down above, have the necessary powers to:
• set the terms and conditions of the issue or issues, in particular
set the amount and the nature of the reserves or premiums to
be incorporated to the share capital, set the number of new
shares to be issued or the amount by which the par value of the
shares that make up the share capital shall be increased, set
the date, even retrospectively, from which the new shares shall
give entitlement or from which the increase in nominal amount
shall take effect, and acknowledge the completion of the
resulting capital increases and amend the by-laws accordingly;
• charge, on its sole initiative, the capital increase expenses to
the amount of related premiums and take from that amount
the sums needed to increase the legal reserve to one-tenth of
capital after each increase;
• make any adjustments required in accordance with
applicable legal and contractual provisions and determine the
arrangements, as the case may be, for maintaining the rights
of the holders of securities or rights giving access to capital;
• resolve, as the case may be, that any rights forming odd lots
shall not be negotiable and that the corresponding shares shall
be sold, with the sums resulting from the sale allocated to the
holders of rights within the timeframe set by legal provisions;
• in turn delegate the powers needed to carry out the issue,
or to refrain there from, within the limits and according to the
terms and conditions that the Board of Directors may set down
beforehand, to the Chief Executive Officer or, in agreement with
him, to one or more deputy Chief Executive Officers;
• and, more generally, take any measures, enter into any
agreements, carry out any formalities and do what is
necessary for the satisfactory completion of the issues under
consideration;
4) sets at twenty-six months as from the date of the present
Shareholders’ Meeting the duration of the present delegation,
which renders null and void any previous delegation granted to
the Board of Directors for the same purposes.
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❚ TWENTIETH RESOLUTION
Overall limitation of the nominal amount of issues of common shares
and debt securities that may result from the above delegations and
authorizations
The Shareholders’ Meeting, ruling in the quorum and majority
conditions required for extraordinary general meetings, after
examining the Board of Directors’ report decides to set:
• at €1 billion, or the equivalent amount on the date of the
issue decision, the maximum nominal amount of the debt
securities that may be issued pursuant to the delegations and
authorizations relating to the issue of securities giving access,
whether immediately or in the future, to a share of capital
or securities giving the right to the grant of debt securities,
given by the thirteenth, fourteenth, fifteenth, seventeenth and
eighteenth resolutions of the present Meeting;
• at €80 million the maximum nominal amount of the capital
increase, whether immediate or in the future, that may be carried
out pursuant to the delegations and authorizations given by the
thirteenth, fourteenth, fifteenth, seventeenth and nineteenth
resolutions of the present Meeting, with any additional nominal
amount of shares to be issued to maintain, in accordance with
the law and applicable contractual stipulations, the rights of
bearers of securities or of rights giving access to capital to be
added to that amount.
❚ TWENTY-FIRST RESOLUTION
Delegation of authority to the Board of Directors for the purposes of
increasing the share capital by the issue of shares or securities giving
access to capital reserved for members of a company savings plan
of the Company or its Group
The Shareholders’ Meeting, ruling in the quorum and majority
conditions required for extraordinary general meetings, after
examining the Board of Directors’ report and the Auditors’ special
report, with respect to the provisions of articles L. 3332-1 et seq.
of the French Labor Code concerning employee shareholding
and pursuant to articles L. 225-129-2 to L. 225-129-6 and article
L. 225-138-1 of the French Code of Commerce:
1) delegates to the Board of Directors its authority to decide the
capital increase of the Company, in one or more times, in the
proportions and at the times that is sees fit, by the issue of
common shares in the Company and/or any other securities
giving access by any means, immediately or in the future to the
capital of the Company reserved for members of a company or
a group savings plan of the Company and/or of the French or
foreign companies or groups affiliated to it in the sense of articles
L. 225-180 of the French Code of Commerce and article L. 3344-1
of the French Labor Code, who also meet any other conditions
imposed by the Board of Directors;
2) resolves that the nominal amount of the share capital increases
that may be carried out pursuant to the present delegation shall not
be greater than €1.6 million, i.e. for guidance only, approximately
1% of the Company’s capital as on December 31, 2010, it being
specified that this ceiling is autonomous and separate from the
overall capital increase ceiling set by the twentieth resolution of
the present Meeting, and that, as the case may be, the nominal
amount of the shares to be issued to maintain, in accordance
with the law and applicable contractual stipulations, the rights of
bearers of securities or rights giving access to capital, shall be
added to that amount;
3) resolves that the subscription price of the shares issued pursuant
to the present delegation shall not be less than the average of
the last prices listed for the twenty stock market trading days
leading up to the date of the Board of Directors’ decision setting
the subscription opening date, minus, as the case may be, the
maximum discount allowed by law on the date of the Board of
Directors’ decision;
4) resolves to cancel shareholders’ pre-emptive subscription right to
the securities to be issued in favor of the beneficiaries mentioned
above;
5) grants all powers, with the possibility of sub-delegating in
the conditions provided by the law, to the Board of Directors
to implement the present delegation and, in particular, for the
purposes of:
• determining the companies of which the employees and
officers may benefit from the subscription offer for the issues
coming under the present delegation,
• set down the conditions, particularly as regards length of
service, that the beneficiaries of those subscription offers
must meet,
• set down the conditions of the issues, acknowledge the capital
increase or increases resulting from any issue made using the
present delegation, amend the by-laws accordingly,
• set the subscription opening and closing dates, the price and
dated date of the issued securities, and the share paying-up
arrangements,
• decide whether the subscriptions may be carried out directly
and/or indirectly through mutual funds,
• set the arrangements and conditions for joining company or
group savings plan, draw up their regulations or, in the event of
preexisting plans, modify the regulations, if needed,
• make, as the case may be, on its sole decision and if it sees
fit, any charges to the premium or premiums related to the
capital increases, particularly for the expenses, fees and duties
arising from the completion of the issues, and take from these
premiums the sums needed to increase the legal reserve to
one-tenth of the new share capital after each capital increase,
• make any adjustments required in accordance with
applicable legal and contractual provisions and determine the
arrangements, as the case may be, for maintaining the rights
of the holders of securities or rights giving access to capital,
• generally take any useful measures, enter into any agreements,
carry out or have carried out any acts or formalities and do the
necessary to complete successfully the planned issues;
6) sets at twenty-six months as from the date of the present
Shareholders’ Meeting the term of validity of the present
delegation, which renders null and void any previous delegation
granted to the Board of Directors for the same purposes.
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❚ TWENTY-SECOND RESOLUTION
Renewal of authorization to grant options for subscription or purchase
of the Company’s shares to employees or corporate officers of the
Company and its subsidiaries, or certain categories of them
The Shareholders’ General Meeting, ruling in the quorum and
majority conditions required for extraordinary Shareholders’ General
Meetings, after examining the Board of Directors’ report and the
Auditors’ special report, in accordance with the provisions of articles
L. 225-177 to L. 225-186 of the French Code of Commerce:
1) authorizes the Board of Directors to grant, as it judges appropriate,
in one or more times, to certain employees and corporate officers
of the Company and, as the case may be, companies and groups
that are affiliated to it in the conditions provided in article L. 225-
180 of the French Code of Commerce, or to certain categories
of them, options giving the right to subscribe new shares or
purchase existing shares in the Company;
2) acknowledges that, pursuant to the provisions of article L. 225-178
of the French Code of Commerce, this authorization entails the
explicit waiver by shareholders of their preemptive subscription
right to the shares that shall be issued as and when options are
exercised, in favor of the beneficiaries of the share subscription
options;
3) resolves that the number of shares that may be granted pursuant
to the present authorization shall not give the right to subscribe
or acquire a total number of shares greater than 5% of the
Company’s capital on the day of the Board’s decision to grant
the options, it being specified that this ceiling is common to
the present resolution and the twenty-third and twenty-fourth
resolutions hereafter and that it is set without taking into account
the number of shares to be issued, as the case may be, to
maintain, in accordance with the law and applicable contractual
stipulations, the rights of the bearers of securities or rights giving
access to capital;
4) resolves that the subscription or purchase price of the shares for
the beneficiaries shall be determined by the Board of Directors on
the date of granting the options, within the limits and according
to the arrangements provided by the law, it being specified that:
• in the event of stock subscription options, the subscription
price shall be equal to 100% of the average of the first prices
listed for the share on the twenty stock market trading days
leading up to the grant date;
• in the event of stock purchase options, the purchase price of
the shares shall be equal to 100% of the average purchase
price of the shares held by the Company with respect to articles
L. 225-208 and L. 225-209 of the French Code of Commerce;
• as an exception, a discount may, as the case may be, be
applied to the share subscription or purchase price of
the options that may be granted with respect to employee
shareholding operations implemented by the Company under
the conditions provided by law;
5) resolves that grants of stock subscription or purchase options to
executive corporate officers shall be subject to the achievement
of one or more performance criteria determined by the Board of
Directors on the day of the grant;
6) sets at ten years the period during which the options must be
exercised, commencing on the date on which they are granted;
7) resolves that no share subscription or purchase option may be
granted less than twenty trading sessions after a coupon giving
the right to a dividend or a preemptive subscription right to a
capital increase is detached from the shares;
8) states that the shares that may be obtained by exercising stock
purchase options granted pursuant to the present resolution shall
be acquired by the Company, either under L. 225-208 of the
French Code of Commerce, or, as the case may be, under the
share buyback program authorized by the twelfth resolution put
to the present Meeting with respect to article L. 225-209 of the
French Code of Commerce or of any share buyback program
implemented before or after the passing of the present resolution;
9) grants to the Board of Directors full powers, with the possibility of
subdelegating in the conditions provided for by law, to implement
this authorization, particularly in order to:
• set the dates on which the options shall be granted,
• define the arrangements and other conditions in which the
options shall be granted and determine the list of beneficiaries
of the options as provided above,
• set the exercise period or periods for the options thus granted,
subject to the maximum term for the options as set down
above,
• provide the possibility of temporarily suspending the exercise
of options for a maximum period of three months in the event
of carrying out financial operations entailing the exercise of a
right attached to the shares,
• decide on the conditions in which the price and number of
shares to be subscribed or purchased may be adjusted when
such adjustments are stipulated by current legal and regulatory
provisions, particularly in the various scenarios provided in
articles R. 225-137 and R. 225-142 of the French Code of
Commerce,
• make, as the case may be, on its sole decision and as it judges
fit, any charges to the issue premium or premiums pertaining
to the capital increases, particularly the premium for expenses,
fees and duties incurred in carrying out the issues, and deduct
from those premiums the amounts needed to increase the
legal reserve to one-tenth of the new share capital after each
capital increase,
• acknowledge the capital increase or increases carried out
pursuant to the present authorization, modify the by-laws
accordingly and carry out or have carried out any acts and
formalities in order to make such capital increases definitive,
• and, in general, do whatever is necessary;
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10) sets at thirty-eight months as from the date of the present
Shareholders’ Meeting the term of validity of the present
delegation, which renders null and void, for the unused part,
any previous delegation granted to the Board of Directors for
the same purposes.
❚ TWENTY-THIRD RESOLUTION
Renewal of authorization to make allotments of free Company’s
shares to employees or corporate officers of the Company and its
subsidiaries, or certain categories of them
The Shareholders’ General Meeting, ruling in the quorum and
majority conditions required for extraordinary Shareholders’
General Meetings, after examining the Board of Directors’ report
and the Auditors’ special report, pursuant to the provisions of articles
L. 225-197-1 et seq. of the French Code of Commerce:
1) authorizes the Board of Directors to make, as it judges appropriate,
in one or more times, free allotments of existing shares or shares
to be issued in the Company to the employees and corporate
officers of the Company and, as the case may be, companies
and groups that are affiliated to it in the conditions provided in
article L. 225-197-2 of the French Code of Commerce, or certain
categories of them;
2) resolves that the shares, whether in existence or to be issued, that
may be granted pursuant to this authorization shall not represent
more than 5% of the Company’s capital on the date of the Board’s
decision to grant the shares, it being specified that this ceiling is
common to the present resolution and the twenty-second and
twenty-fourth resolutions of the present Meeting and that it is set
without taking into account the number of shares to be issued,
as the case may be, to maintain, in accordance with the law and
applicable contractual stipulations, the rights of the bearers of
securities or rights giving access to capital;
3) resolves that the vesting of the free shares granted to executive
corporate officers shall be subject to the achievement of one or
more performance criteria determined by the Board of Directors
on the date of grant, except however for any free shares that may
be granted with respect to employee shareholding operations
implemented by the Company;
4) resolves that the shares shall be definitively granted to their
beneficiaries at the end of the vesting period set by the Board of
Directors, while such period may not be less than that provided
by the regulations in force on the grant date;
5) resolves that the minimum period for which the beneficiaries must
hold the shares shall be that set by the Board of Directors, while
such period may not be less than that provided by the regulations
in force on the grant date;
6) notes that, in the case of free grant of shares to be issued, this
decision constitutes, in favor of the beneficiaries, a waiver ipso
jure by the shareholders of any right to the new shares freely
granted and the portion of the reserves, profits or premiums that
will be incorporated into capital if new shares are issued;
7) states that the existing shares that may be granted pursuant to
the present resolution must be acquired by the Company, either
under article L. 225-208 of the French Code of Commerce, or, as
the case may be, under the share buyback program authorized
by the twelfth resolution put to the present Meeting with respect
to article L. 225-209 of the French Code of Commerce or any
share buyback program implemented before or after the passing
of the present resolution;
8) delegates to the Board of Directors full powers, with the option
of subdelegating in the conditions provided by law, to implement
the present authorization, in particular in order to:
• determine the categories of the beneficiaries of the allotments
and the terms and conditions and, as the case may be, criteria
for granting the shares,
• set the vesting and holding periods for the shares in accordance
with the minimum periods provided for by the applicable law,
• set and define the issue conditions for the shares that may be
issued under this authorization,
• adjust, as the case may be, during the acquisition period,
the number of shares pertaining to any operations on the
Company’s share capital in order to protect the rights of the
beneficiaries,
• acknowledge, as the case maybe, the capital increase or
capital increases that may be carried out pursuant to this
authorization, modify the by-laws accordingly, and carry out
or have carried out any acts and formalities in order to make
such capital increases definitive,
• and, in general, do whatever is necessary;
9) sets at thirty-eight months as from the date of the present
Shareholders’ Meeting the term of validity of the present
delegation, which renders null and void, for the unused part, any
previous delegation granted to the Board of Directors for the same
purposes.
❚ TWENTY-FOURTH RESOLUTION
Delegation of authority to the Board of Directors for the purposes
of issuing share subscription and/or acquisition warrants reserved
for the employees and corporate officers of the Company and/or its
subsidiaries, or for specific categories thereof, without shareholders’
preemptive subscription right
The Shareholders’ General Meeting, ruling in the quorum and
majority conditions required for extraordinary Shareholders’ General
Meetings, having considered the Board of Directors’ report and the
Statutory Auditors’ special report, in accordance with the provisions
of articles L. 225-129 et seq., L. 225-138 and L. 228-91 et seq. of the
French Code of Commerce:
1) delegates its authority to the Board of Directors, with the possibility
of sub-delegating, to decide on the issue, in one or more times, of
share subscription and/or acquisition warrants (“BSA”) that may
or may not be redeemable by the Company;
2) resolves that the overall nominal amount of the capital increases
that may be carried out pursuant to the present delegation may
not be greater than 5% of the Company’s capital on the day
of the issue, it being specified that (i) this ceiling is common to
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the present resolution and the twenty-second and twenty-third
resolutions of the present Meeting and that (ii) this amount does
not take into account the shares to be issued, as the case may be,
to maintain, in accordance with the law, the rights of the bearers
of securities or rights giving access to capital;
3) resolves that the subscription price of the shares to which the
share subscription and/or acquisition warrants shall give the right
shall be at least equal to the average closing price of shares in
the Company for the twenty stock market trading sessions prior
to the day on which it is decided to issue the warrants;
4) resolves to cancel the shareholders’ preemptive subscription right
to the share subscription and/or acquisition warrants to be issued
and to reserve that right for employees and corporate officers of
the Company and/or its French and foreign subsidiaries in the
sense of articles L. 225-180 and L. 233-3 of the French Code of
Commerce, or for specific categories thereof;
5) duly notes that, in accordance with the provisions of the last
paragraph of article L. 225-132 of the French Code of Commerce,
the present delegation entails ipso jure the waiver by the
shareholders of their preemptive subscription right to the shares
to be issued by the exercise of the BSA in favor of the holders of
those warrants;
6) resolves that the Board of Directors shall have, with the option of
subdelegating in the conditions provided by law and under the
conditions and within the limits set down above, the necessary
powers to:
• determine the list and, as the case may be, the categories
of individual authorized to subscribe to the BSA among the
employees and corporate officers of the Company and/or its
subsidiaries, as well as the terms and conditions and, as the
case may be, subscription criteria,
• determine the number of BSA to be granted to each beneficiary
and the number of shares to which each warrant shall give
the right,
• determine whether the BSA issued shall be redeemable or not
by the Company,
• set, in accordance with the regulations in force on the day
of issue, all the characteristics of the BSA, particularly their
subscription price, the terms, conditions and periods for the
subscription and exercise of the warrants, any immobilization
period for the warrants, their adjustment mechanism as well
as, as the case may be, the trigger threshold and period of
redemption of the BSA by the Company and, more generally,
all the terms, conditions and arrangements for the issue,
• set the subscription price of the shares to which the BSA shall
give the right, under the conditions provided for above,
• acknowledge the completion of the share capital increase
that may arise from the exercise of the BSA and make the
corresponding amendments to the by-laws,
• charge, at its sole initiative, the share capital increase expenses
to the amount of related premiums and take from that amount
the sums needed to raise the legal reserve to one tenth of
capital after each increase,
• make any adjustments required in compliance with legal and/or
contractual provisions and set the arrangements for ensuring
that any rights of bearers of securities or rights giving access
to capital that may exist on the day of the issue in question
are upheld,
• and, more generally, take any measures, enter into any
agreements, carry out any formalities and do what is necessary
to see the present delegation completed correctly;
7) sets at twenty-six months as from the date of the present
Shareholders’ Meeting the term of validity of the present
delegation, which renders null and void any previous delegation
granted to the Board of Directors for the same purposes.
❚ TWENTY-FIFTH RESOLUTION
Authorization to the Board of Directors to reduce the share capital
by canceling self-held shares
The Shareholders’ Meeting, ruling in the quorum and majority
conditions required for extraordinary general meetings, after
examining the Board of Directors’ report and the Auditors’ special
report:
1) authorizes the Board of Directors, with the possibility of sub-
delegating in the conditions provided by the law, to cancel, in
one or more times, the shares held by the Company in itself
within the limit of 10% of capital per twenty-four month period,
and to reduce the share capital accordingly by charging the
difference between the purchase value and the nominal value of
the cancelled shares to available premiums and reserves;
2) grants all powers to the Board of Directors for the purposes
of setting the definitive amount of the capital reduction within
the limits provided by law and by the present resolution, to
set its arrangements, acknowledge its completion, charge the
difference between the purchase value and the nominal value of
the cancelled shares to the available premiums and reserves of
its choice, carry out all acts, formalities or declarations in order
to make the capital increases carried out pursuant to the present
authorization definitive and amend the by-laws accordingly;
3) sets at twenty-six months from the date of the present
Shareholders’ Meeting the duration of the present authorization,
which renders null and void, any previous delegation granted to
the Board of Directors for the same purposes.
❚ TWENTY-SIXTH RESOLUTION
Powers
The Shareholders’ Meeting, ruling in the quorum and majority
conditions required for ordinary Shareholders’ General Meetings,
fully empowers the bearer of a duplicate or an extract of the minutes
of the present Meeting to carry out any formalities with respect to
registration or publication.
88.1 PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT 258
8.2 CERTIFICATE OF THE PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT 258
8.3 AUDITORS 259
8.4 INFORMATION INCLUDED IN THE REGISTRATION DOCUMENT BY REFERENCE 260
8.5 PERSON RESPONSIBLE FOR FINANCIAL INFORMATION 260
PERSONS RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND THE AUDIT OF ACCOUNTS
258 2010 REGISTRATION DOCUMENT IMERYS
PERSONS RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND THE AUDIT OF ACCOUNTS 8Person responsible for the Registration Document
8.1 | PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT
Gérard Buffière, Chief Executive Officer
8.2 | CERTIFICATE OF THE PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT
I certify, after taking every reasonable measure for that purpose, that
the information contained in the present Registration Document is,
to the best of my knowledge, accurate and does not contain any
omission that could make it misleading.
I certify, to my knowledge, that the accounts have been prepared in
accordance with applicable accounting standards and give a fair view
of the assets, liabilities, financial position and profit and loss of the
Company and all undertakings included in the consolidation, and that
the Board of Directors’ Management report appearing on pages 60 to
69 presents a fair picture of the development and performance of the
business and financial position of the Company and all undertakings
included in the consolidation as well as a description of the main risks
and uncertainties to which they are exposed.
I have obtained a letter of completion from the Statutory Auditors
in which they state that they have checked the information on
the financial position and the financial statements given in this
Registration Document and that they have read the Document in
its entirety.
The financial information presented in the Registration Document
is the subject of the Statutory Auditors’ Reports appearing on
pages 70 to 74. The report on the consolidated statements for
the period ending December 31, 2010 contains an observation
concerning the financial year’s changes of method. The reports on
the consolidated statements for the period ending December 31,
2009 and December 31, 2008, incorporated by reference to the
corresponding historical financial statements as specified on
page 260 of the present Registration Document, respectively contain
an observation concerning the financial year’s changes of method.
Paris, March 31, 2011
Gérard Buffière
Chief Executive Officer
259IMERYS 2010 REGISTRATION DOCUMENT
PERSONS RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND THE AUDIT OF ACCOUNTS
Auditors
8
8.3 | AUDITORS
❚ STATUTORY AUDITORS:
Deloitte & Associés
represented by Arnaud de Planta
185, avenue Charles-de-Gaulle
92524 Neuilly-sur-Seine Cedex - France
first appointed by the Ordinary and Extraordinary
Shareholders’ General Meeting of May 5, 2003
and renewed by the Ordinary and Extraordinary
Shareholders’ General Meeting of April 29, 2010
Ernst & Young et Autres
represented by François Carrega
Faubourg de l’Arche
11, allée de l’Arche
92037 Paris - La Défense Cedex - France
first appointed by the Ordinary and Extraordinary
Shareholders’ General Meeting of April 29, 2010
in replacement of Ernst & Young Audit
Ernst & Young et Autres and Deloitte & Associés are members of the Auditors’ Regional Company of Versailles.
❚ ALTERNATE AUDITORS:
BEAS
7-9 Villa Houssay
92524 Neuilly-sur-Seine Cedex - France
part of the Deloitte network
first appointed by the Ordinary and Extraordinary
Shareholders’ General Meeting
of May 5, 2003
Auditex
Faubourg de l’Arche
11, allée de l’Arche
92037 Paris - La Défense Cedex - France
part of the Ernst & Young network
first appointed by the Ordinary and Extraordinary
Shareholders’ General Meeting of April 29, 2010
in replacement of Mr. Jean-Marc Montserrat
260 2010 REGISTRATION DOCUMENT IMERYS
PERSONS RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND THE AUDIT OF ACCOUNTS 8Information included in the Registration Document by reference
8.4 | INFORMATION INCLUDED IN THE REGISTRATION DOCUMENT BY REFERENCE
Pursuant to article 28 of EC Regulation 809/2004 of April 29, 2004,
the following information is included in the present Registration
Document by Reference:
p with respect to the financial year ending on December 31,
2009, the consolidated financial statements, annual financial
statements, the related Auditors’ reports, the Auditors’ special
report on regulated agreements and commitments and the
Board of Directors’ management report appearing respectively
on pages 120 to 181, 182 to 203, 64 to 66, 67 and 54 to 63 of
the 2009 Registration Document filed with Autorité des marchés
financiers on April 1, 2010 under number D. 10-0205;
p with respect to the financial year ending on December 31,
2008, the consolidated financial statements, annual financial
statements, the related Auditors’ reports, the Auditors’ special
report on regulated agreements and commitments and the Board
of Directors’ management report appearing on pages 116-176,
177-197, 65-67, 218 and 54-64 of the 2008 Registration Document
filed with Autorité des marchés financiers on April 3, 2009 under
number D. 09-0192.
Any other information that is not included in the present Document
is either of no relevance to investors or mentioned in another part of
the Registration Document.
8.5 | PERSON RESPONSIBLE FOR FINANCIAL INFORMATION
Michel Deville
Group Chief Financial Officer
Telephone: +33 (0) 1 49 55 66 55
http://www.imerys.com
9.1 CROSS REFERENCE TABLE 262
9.2 TABLE OF RECONCILIATION WITH THE ANNUAL FINANCIAL REPORT 266
9CROSS REFERENCE AND RECONCILIATION
TABLES
262 2010 REGISTRATION DOCUMENT IMERYS
CROSS REFERENCE AND RECONCILIATION TABLES 9Cross reference table
9.1 | CROSS REFERENCE TABLE
In order to facilitate the reading of this Registration Document, the subject index can be used to identify the main information required by the
Autorité des marchés financiers (the French Securities Regulator) with respect to its regulations and instructions.
Items of Annex 1 to the EC Regulations 809/2004 of April 29, 2004 References Pages
❚ 1 Persons responsible Chapter 8
1.1 All persons responsible for the information given in the Registration Document 8 258; 260
1.2 Declaration by those responsible for the Registration Document 8 258
❚ 2 Statutory Auditors Chapter 8
2.1 Name and address 8 259
2.2 Statutory Auditors having resigned or not renewed n.a.
❚ 3 Selected financial information Chapter 1
3.1 Selected historical financial information 1 4
3.2 Selected historical financial information for interim periods n.a.
❚ 4 Risk Factors Chapter 4 112-117
❚ 5 Information about the Issuer Chapters 1; 2; 5; 6
5.1 History and development 1; 2; 6 5-6; 63-65; 214
5.1.1 Legal and commercial name 6 214
5.1.2 Place and number of registration 6 214
5.1.3 Date of incorporation and length of life 6 214
5.1.4 Domicile and legal form, legislation under which the Issuer operates 6 214
5.1.5 Important events in the development of the Issuer’s business 2 63-65
5.2 Investments 2; 5
62-65; 130;
132-133; 162
5.2.1 Main investments for each financial year of the period covered by the historical financial information up to the
date of the Registration Document 5
130; 132-133;
162
5.2.2 Issuer’s main investments that are in progress 2 62-65
5.2.3 Issuer’s main future investments n.a.
❚ 6 Business overview Chapters 1; 4
6.1 Main activities 1 9-45
6.1.1 Description of main activities 1 9-41
6.1.2 New products or services that have been introduced 1 42-45
6.2 Main markets 1 17; 27; 32; 36
6.3 Exceptional factors having influenced information given pursuant to items 6.1 and 6.2 n.a.
6.4 Issuer’s dependence on patents, licenses or industrial, commercial or financial contracts or new manufacturing
techniques 1; 4 45; 113; 115
6.5 Basis for any statement made by the Issuer regarding its competitive position 1 5
❚ 7 Organizational structure Chapters 1; 5
7.1 Brief description of the Group and the Issuer’s position within the Group 1 5-8
7.2 Main subsidiaries 5 185-187; 211
❚ 8 Properties, plants and equipment Chapter 5
8.1 Information regarding any existing or planned material tangible fixed assets 5 162
8.2 Environmental issues that may affect the Issuer’s utilization of the tangible fixed assets n.a.
263IMERYS 2010 REGISTRATION DOCUMENT
CROSS REFERENCE AND RECONCILIATION TABLES
9
Cross reference table
Items of Annex 1 to the EC Regulations 809/2004 of April 29, 2004 References Pages
❚ 9 Operating and financial review Chapters 1; 2; 5
9.1 Financial position 5 126-131
9.2 Operating results 2; 5
60-62; 167;
177; 183
9.2.1 Information regarding significant factors materially affecting the Issuer’s income from operations 5 167; 177-183
9.2.2 Reasons for material changes in net sales or revenues 2 60-62
9.2.3 Strategy and external factors 1 6-7
❚ 10 Capital resources Chapter 5
10.1 Information concerning the Issuer’s capital resources 5 168
10.2 Explanation of the source and amounts of the Issuer’s cash flows 5 130
10.3 Borrowing and funding structure of the Issuer 5 174-177
10.4 Restriction on use of capital resources n.a.
10.5 Information regarding the anticipated sources of funds needed to fulfil commitments
referred to in items 5.2.3 and 8.1 5 174-177
❚ 11 Research and development, patents and licenses Chapter 1 42-45
❚ 12 Information on trends Chapter 2
12.1 Most significant recent trends in production, sales, inventory, costs and selling prices 2 60-65
12.2 Information on any known trends that are reasonably likely to have a material effect on the Issuer’s prospects
for at least the current financial year 2 65
❚ 13 Profit forecasts or estimates n.a
13.1 A statement setting out the main assumptions upon which the Issuer has based its forecast, or estimate n.a.
13.2 A report prepared by independent accountants or Auditors n.a.
13.3 Profit forecast or estimate prepared on a basis comparable with the historical financial information n.a.
13.4 Statement setting out whether or not that forecast is still correct as at the time of the Registration Document n.a.
❚ 14 Management and supervisory bodies Chapter 3
14.1 Names, business address and functions in the Issuer, and indication of the main activities performed outside
the Issuer; nature of any family relationship, details of relevant management expertise; any convictions in relation
to fraudulent offences; bankruptcies, receiverships or liquidations; public incriminations, sanctions by statutory
or regulatory authorities 3 77-87; 95-96
14.2 Conflict of interests 3 87
❚ 15 Remuneration and benefits Chapters 3; 5
15.1 Amount of remuneration paid and benefits in kind granted to such persons by the Issuer and its subsidiaries 3 96-101
15.2 Total amount set aside or accrued to provide pensions, retirements or similar benefits 3; 5 100-101; 188
❚ 16 Management and supervisory body practices Chapter 3
16.1 Date of expiration of the current term of office 3 78; 95
16.2 Information about members of the management and supervisory bodies’ service contracts with the Issuer
or any of its subsidiaries 3 87
16.3 Audit Committee and Remuneration Committee 3 91-94
16.4 A statement on Corporate Governance 3 76
❚ 17 Employees Chapters 1; 3; 6
17.1 Number of employees 1 56
17.2 Shareholdings and stock-options 1; 3; 6
58; 78; 95; 101-
108; 221-222
17.3 Description of any arrangement for involving the employees in the capital of the Issuer 1; 6 58; 221-222
264 2010 REGISTRATION DOCUMENT IMERYS
CROSS REFERENCE AND RECONCILIATION TABLES 9Cross reference table
Items of Annex 1 to the EC Regulations 809/2004 of April 29, 2004 References Pages
❚ 18 Major shareholders Chapter 6
18.1 Name of any person who has an interest in the Issuer’s capital or voting rights which is notifiable under the Issuer’s
national law 6 222-223
18.2 Whether the Issuer’s major shareholders have different voting rights 6 215
18.3 State whether the Issuer is directly or indirectly owned or controlled 6 222-223
18.4 Description of any arrangement, known to the Issuer, the operation of which may at a subsequent date result
in a change of control of the Issuer 6 223
❚ 19 Related party transactions Chapter 5 187-188
❚ 20 Financial information concerning the Company’s assets and liabilities, financial positions,
profits and losses
Chapters 1; 2; 4;
5; 6; 8
20.1 Historical financial Information 1; 8 4; 260
20.2 Pro forma financial Information n.a.
20.3 Statutory and consolidated financial statements 5 126-211
20.4 Auditing of historical annual information 2; 8
70-72;
258; 260
20.4.1 Statement that the historical financial information has ben audited 8 258
20.4.2 Indication of other information in the Registration Document which has been audited by the Auditors n.a.
20.4.3 Source and nature of the financial data stated in the Registration Document but not extracted from the
Issuer’s audited financial statements n.a.
20.5 Age of latest audited financial information 2; 8 70-72; 260
20.6. Interim and other information n.a.
20.7 Dividend policy 6 227
20.7.1 Dividend per share 1; 2; 5; 6 4; 60; 129; 227
20.8 Legal and arbitration proceedings 4; 5 115; 173
20.9 Significant change in the Issuer’s financial or trading position 2; 5 68; 190
❚ 21 Additional information Chapters 3; 6
21.1 Share capital 6 216 -219; 221
21.1.1 Amount of issued capital, number of shares, par value per share, reconciliation of the number of shares
outstanding at the beginning and end of the year 6 216
21.1.2 Shares not representing capital n.a.
21.1.3 Shares owned by the Issuer itself 6 221
21.1.4 Convertible securities, exchangeable securities or securities with warrants n.a.
21.1.5 Information about and terms of any acquisition rights and/or obligation over authorized but non issued
capital or an undertaking to increase the capital 6 217-219
21.1.6 Information about any capital of any member of the Group which is under option or agreed conditionally or
unconditionally to be put under option n.a.
21.1.7 History of share capital 6 216
21.2 Memorandum and Articles of Association 6 214
21.2.1. The Issuer’s scope of business 6 214
21.2.2 Members of the management and supervisory bodies 3 77-87; 95-96
21.2.3 Description of rights, preferences and restrictions attaching to the existing shares 6 214-215
21.2.4 Changes of the rights of holders of the shares 6 215
21.2.5 Description of the conditions governing the manner in which Annual General Meeting of Shareholders are
called including the conditions of admission 6 214-215
21.2.6 Change in control of the Issuer n.a.
21.2.7 An indication of the Articles of Association provisions, if any, governing the ownership threshold above which
shareholder ownership must be disclosed 6 215; 222
21.2.8 Changes in the capital n.a.
265IMERYS 2010 REGISTRATION DOCUMENT
CROSS REFERENCE AND RECONCILIATION TABLES
9
Cross reference table
Items of Annex 1 to the EC Regulations 809/2004 of April 29, 2004 References Pages
❚ 22 Material contracts Chapter 4 115
❚ 23 Third party information and statement by experts and declaration of any interest n.a.
23.1 Where a statement or report attributed to a person as an expert is included in the Registration Document,
provide such person’s name, business address, qualifications and material interest if any in the Issuer n.a.
23.2 Confirmation that this information has been accurately reproduced n.a.
❚ 24 Documents on display Chapter 6 215; 228
❚ 25 Information on holdings Chapter 5 185-187; 211
266 2010 REGISTRATION DOCUMENT IMERYS
CROSS REFERENCE AND RECONCILIATION TABLES 9Table of reconciliation with the Annual Financial Report
9.2 | TABLE OF RECONCILIATION WITH THE ANNUAL FINANCIAL REPORT
This Registration Document includes all information of the Annual Financial Report provided for in I of article L. 451-1-2 of the French Monetary
and Financial Code and in article 222-3 of the general regulations of the AMF.
The table below sets out the references to the extracts from the Registration Document that correspond to the various items comprising the
Annual Financial Report.
Sections Pages
Statutory financial statements 191-211
Consolidated financial statements 126-190
Statutory Auditors’ Report on the financial statements 72
Statutory Auditors’ Report on the Consolidated financial statements 70-71
Board of Directors’ Management Report 60-69
Certificate of the person responsible for the Board of Directors’ Management Report 258
Audit fees 212
Report of the Chairman of the Board of Directors on the conditions for preparing and organizing the Board’s work
and on the risk management and internal control procedures set up by the Company 117-123
Statutory Auditors’ Report on the Report of the Chairman of the Board of Directors 124
267IMERYS 2010 REGISTRATION DOCUMENT
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❚ CONTACTS
IMERYS
Financial Communication
Tel: +33 (0) 1 49 55 66 55
Fax: +33 (0) 1 49 55 63 98
E-mail: [email protected]
Post:
Imerys
Financial Communication
154, rue de l’Université
75007 Paris - France
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154, RUE DE L’UNIVERSITÉ | 75007 PARIS | FRANCE
TEL: + 33 (0) 1 49 55 63 00 | FAX: + 33 (0) 1 49 55 63 01www.imerys.com